Below are solutions to frequently asked questions about entering Form 990/990-PF net investment income or adjusted net income in the Exempt Organization return.
Why do gross rents entered in Rental Income show on Form 990-PF line 11 instead of line 5a?
Rents will show on Form 990-PF, line 5a (Gross rents) or Form 990-PF, line 11 (Other revenue) based on whether they're considered investment income or noninvestment income.
Gross rents that are noninvestment income show on Form 990-PF, line 11. The default is to show rents as noninvestment income. Noninvestment income may require reconciliation to the books on line 11.
Follow these steps to reconcile noninvestment income:
- Go to Input Return ⮕ Revenue ⮕ Net Invest. Inc./Adj. Net Inc. (990-PF)
- Enter the amount in the applicable column for the Rental income - noninvestment property field.
Gross rents that are investment income show on Form 990-PF, line 5(a).
Follow these steps to show gross rents as investment income:
- Go to Input Return ⮕ Revenue ⮕ Rental Income.
- Scroll down to the General Information section.
- Mark the checkbox labeled Investment income (990-PF).
How do I input 990-PF. lines 3a and 3b?
- Go to Input Return ⮕ Revenue ⮕ Other income Producing Act.
- Scroll down to the Related or Exempt Function Income section.
- Enter the total taxable and tax-exempt interest received in the Interest on savings & cash investments field.
- This entry flows to Form 990-PF, Part I, line 3(a).
- Select Net Invest. Inc./Adj. Net Inc. (990-PF)
- Enter the taxable interest received in the ** Interest on savings & cash investments ** field.
- This entry flows to Form 990-PF, Part I, line 3(b).
Where can I enter Schedule K-1 information flowing into an exempt organization return?
There's no specific detail screen to enter income reported to the organization from a K-1 in the Exempt Organization module. Income and expenses reported on the Schedule K-1 may be entered on different screens based on the kind of income or expense and how it should be reported on Form 990, 990-PF, or 990-T.
Below are examples of which screens can be used:
- Other Revenue
- Rental Income
- Investment Income
- Passthroughs Income (990-T)
- Unrelated Business (990-T)
This list doesn't cover every screen where you can report the income or expenses. It's up to the preparer to determine where to report the amounts from the K-1 on the return.