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How to resolve Lacerte critical diagnostic Ref 6574 - Form 990 Unrelated gross income

SOLVEDby IntuitLacerte Tax7Updated 3 weeks ago

This article will help resolve the following critical diagnostic for Form 990 and/or Form 990-T:

  • The organization has unrelated gross income of $1,000 or more during the year covered by this return, and has not filed a Form 990-T tax return this year (ref #6574).

This diagnostic generates when one or more items of revenue, worth $1,000 or more, are entered as unrelated business income. When the exempt organization has $1,000 or more of unrelated income, Form 990-T is required. Lacerte produces this diagnostic when it detects that Form 990-T is required, but isn't currently generated with the return.

You can clear this diagnostic by either removing the unrelated income or by generating Form 990-T.

To generate Form 990-T:

  1. Go to Screen 1, Client Information.
  2. Scroll down to the Return Info section.
  3. From the dropdown menu select the appropriate 990-T return type.
    • The 990-T return should now be generating and the diagnostic cleared.

To resolve this diagnostic without generating Form 990-T:

  1. Go to Screen 6, Information Questions to the section Compliance (990, Part V and 990EZ, Part V).
    • Scroll to the subsection Form 990 and Form 990-EZ and make sure there isn't a 1 entered in the field Unrelated business gross income of $1, 000 or more or lobbying proxy tax: 1=yes, 2=no, 3=N/A (3a) (35a) [O].
  2. Go to Screen 17, Program Service Revenue.
    • Make sure there are no amounts entered in the Unrelated Business Income columns (codes 4, 5 & 6).
  3. Go to Screen 18, Other Income Producing Act.
    • Scroll to the section Unrelated Business Income and make sure there are no entries.
  4. Go to Screen 20, Other Revenue.
    • Make sure there are no entries in the Unrelated Business Income fields.
  5. Go to Screen 22, Rental Income.
    • For each property, make sure there are no entries in the Unrelated Business Income fields in the General Information section.
  6. Go to Screen 23, Other Investment Income.
    • Make sure there are no amounts in the Unrelated Business Income columns.
  7. Go to Screen 24, Dispositions.
    • Select the Misc (C/O, CGD. etc) link in the top-left menu.
    • Make sure there are no entries in the Capital Gain Distributions (1099-DIV) section, in the field for Unrelated business income (2a) (code 208).
  8. Go to Screen 25, Fundraising and Gaming.
    • Select Gaming Information from the top-left menu.
    • For each event, make sure there are no entries in the Unrelated business income fields.
  9. Go to Screen 26, Inventory Sales.
    • Make sure there are no entries in the Unrelated Business Income fields.
    • Make sure there are no entries in Screens 27, 28, 29, 30, 31 and 32.
  10. Go to Screen 33, Income Overrides.
    • Select Unrelated Business Income Overrides from the left menu.
    • Make sure there are no entries on this screen.

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