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Common questions about Form 990 net investment income/adjusted net income

SOLVEDby IntuitLacerte Tax1Updated July 27, 2021

Below are solutions to frequently asked questions about entering Form 990/990-PF net investment income or adjusted net income in the Exempt Organization module of Lacerte.

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:

  1. Go to Screen 21, Net Invest. Inc. / Adj. Net Income (990-PF).
  2. 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:

  1. Go to Screen 22, Rental Income.
  2. Scroll down to the General Information section.
  3. Mark the checkbox labeled Investment income (990-PF).
  1. Go to Screen 18, Other Income Producing Act.
  2. Scroll down to the Related or Exempt Function Income section.
  3. 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).
  4. Go to Screen 21, Net Invest. Inc. / Adj. Net Income (990-PF).
  5. 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).

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:

  • Screen 20, Other Revenue
  • Screen 22, Rental Income
  • Screen 23, Investment Income
  • Screen 24, Dispositions
  • Screen 27, Passthroughs Income (990-T)
  • Screen 37, 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.

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