Instructions for Form 990-T
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2025
Instructions for Form 990-T
Exempt Organization Business Income Tax Return (and proxy tax under section
6033(e))
Section references are to the Internal Revenue Code
unless otherwise noted.
Contents
Page
What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Who Must File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
When, Where, and How to File . . . . . . . . . . . . . . . . . . 5
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . 10
Part I. Total Unrelated Business Taxable Income . . . . 12
Part II. Tax Computation . . . . . . . . . . . . . . . . . . . . . 13
Part III. Tax and Payments . . . . . . . . . . . . . . . . . . . . 14
Part IV. Statements Regarding Certain Activities
and Other Information . . . . . . . . . . . . . . . . . . . . 16
Part V. Supplemental Information . . . . . . . . . . . . . . . 17
General Instructions—Schedule A (Form 990-T) . . . . 18
Specific Instructions—Schedule A (Form 990-T) . . . 20
Part I. Unrelated Trade or Business Income . . . . . . . 20
Part II. Deductions Not Taken Elsewhere . . . . . . . . . . 24
Part III. Cost of Goods Sold . . . . . . . . . . . . . . . . . . . 28
Part IV. Rent Income . . . . . . . . . . . . . . . . . . . . . . . . 29
Part V. Unrelated Debt-Financed Income . . . . . . . . . 30
Part VI. Interest, Annuities, Royalties, and Rents
From Controlled Organizations . . . . . . . . . . . . . 32
Part VII. Investment Income of a Section 501(c)(7),
(9), or (17) Organization . . . . . . . . . . . . . . . . . . 32
Part VIII. Exploited Exempt Activity Income, Other
Than Advertising Income . . . . . . . . . . . . . . . . . . 33
Part IX. Advertising Income . . . . . . . . . . . . . . . . . . . 33
Part X. Compensation of Officers, Directors, and
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Part XI. Supplemental Information . . . . . . . . . . . . . . 34
Business Activity Codes . . . . . . . . . . . . . . . . . . . . . 36
Appendix A. Definitions . . . . . . . . . . . . . . . . . . . . . . 37
Appendix B. Charitable Contribution Deduction . . . . . 39
Appendix C. Public Inspection of Form 990-T
Returns Filed by Section 501(c)(3)
Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Future Developments
For the latest information about developments related to
Form 990-T and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form990T.
Feb 3, 2026
What’s New
Gain from the sale or exchange of qualified farmland
property to qualified farmers. P.L. 119-21, commonly
known as the One Big Beautiful Bill Act, created new
section 1062 regarding the gain from the sale or exchange
of qualified farmland property to qualified farmers. Section
1062 allows taxpayers to elect to pay the net income tax
attributable to the gain from the sale or exchange of
qualified farmland property to qualified farmers in four
equal annual installments. This election is available for
sales and exchanges of qualified farmland property to a
qualified farmer in tax years beginning after July 4, 2025.
For more information, see section 1062 and new Form
1062, Deferral of Tax on Gain From the Sale or Exchange
of Qualified Farmland Property to Qualified Farmers, when
it is available.
To report the section 1062 applicable net tax liability
and the installment due in the first tax year, two lines were
added on Form 990-T. Report the full amount of section
1062 applicable net tax liability on Part III, line 6k. Report
the first installment due in tax year 2025 on Form 990-T,
Part III, line 5b. For more information, see the instructions
for Line 5b and Line 6k, later.
Relief from additions to tax for underpayment of estimated income tax by taxpayers making an election
under section 1062. The IRS will waive a portion of the
penalty imposed under section 6655 for failure to make
estimated tax payments attributable to a qualified sale or
exchange of qualified farmland to qualified farmers for
which an election under section 1062(a) is properly made.
Taxpayers that elect under section 1062 to defer payment
of tax may calculate required estimated tax payments
using the guidance in Notice 2026-3. See Notice 2026-3,
2026-02 I.R.B. 307, available at IRS.gov/irb/
2026-02_IRB#NOT-2026-3.
Domestic research and experimental expenditures.
P.L. 119-21 adds new section 174A to the Internal
Revenue Code. Section 174A(a) allows organizations to
deduct amounts paid or incurred for domestic research
and experimental expenditures in tax years beginning
after December 31, 2024.
Alternatively, under section 174A(c), an organization
may elect to charge such expenditures to a capital
account and amortize such expenditures ratably over a
period of not less than 60 months, beginning with the
month in which the organization first realizes benefits from
such expenditures.
In addition, section 70302(f) of P.L. 119-21 provides
organizations with various transition options that may be
applied to recover unamortized amounts paid or incurred
in tax years beginning after December 31, 2021, and
Instructions for Form 990-T (2025) Catalog Number 11292U
Department of the Treasury Internal Revenue Service www.irs.gov
before January 1, 2025, that were capitalized and
amortized for such tax years. See Rev. Proc. 2025-28,
2025-38 I.R.B. 393 available at IRS.gov/irb/
2025-38_IRB#REV-PROC-2025-28, for information
regarding the transition options contained in section
70302(f) of P.L. 119-21, as well as the procedures to
follow to begin applying either section 174A(a) or (c) for
the organization’s first tax year beginning after December
31, 2024.
Direct deposit. If there is an overpayment on Part III,
line 11, enter the organization’s direct deposit information
on Form 8050, Direct Deposit of Tax Exempt or
Government Entity Tax Refund. See the instructions for
Line 11, later, for more information.
Reminders
Required electronic filing. If you are an organization or
trust defined in section 511 and need to file Form 990-T,
you are required to file electronically. See When, Where,
and How to File, later, for more information.
Tax-exempt and governmental entities. For tax years
beginning after 2022, applicable entities (such as certain
tax-exempt and governmental entities) can elect to treat
certain general business credits as a payment of income
tax. See Applicable Entities Making an Elective Payment
Election, later.
Advanced manufacturing investment credit. Eligible
filers may elect to treat the advanced manufacturing
investment credit with respect to a facility as a payment of
income tax under section 48D(d). See section 48D and
the Instructions for Form 3468.
Alternative minimum tax. The Inflation Reduction Act of
2022 (IRA 2022) amended section 55 to impose a new
corporate alternative minimum tax (CAMT) based on the
adjusted financial statement income (AFSI) of an
applicable corporation. See Form 4626, Alternative
Minimum Tax-Corporations, and its instructions, for more
information.
Extension of time to file. Use Form 8868 to allow the
following entities filing Form 990-T to make an elective
payment election to request an extension of time to file
Form 990-T.
• The government of any U.S. territory or political
subdivision or instrumentality thereof.
• A state, the District of Columbia, or political
subdivision or instrumentality or agency thereof.
• The Tennessee Valley Authority.
• An Indian tribal government or a subdivision or
instrumentality or agency thereof.
Caution: An elective payment election must be made on
a return filed by the due date for the return, including
extensions. All entities filing 990-T must use Form 8868 to
request an extension of time to file Form 990-T.
Form 4626. Attach Form 4626, Alternative Minimum
Tax—Corporations, to your Form 990-T, if applicable. See
Alternative Minimum Tax, Line 5, later, for more
information.
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The IRS is a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of
missing children selected by the Center may appear in
instructions on pages that would otherwise be blank. You
can help bring these children home by looking at the
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(1-800-843-5678) if you recognize a child.
Phone Help
If you have questions and/or need help completing Form
990-T, call 877-829-5500. This toll-free telephone service
is available Monday through Friday.
How To Get Forms and Publications
Internet. Access IRS.gov 24 hours a day, 7 days a week
to:
• Download free forms, instructions, and publications;
• Order IRS products online;
• Research your tax questions online;
• Search publications online by topic and keyword;
• Use online Internal Revenue Code (IRC), Regulations,
or other official guidance;
• View Internal Revenue Bulletins (IRBs);
• Sign up to receive local and national tax news by
email.
Getting tax forms, instructions, and publications. Go
to IRS.gov/Forms to download current and prior-year
forms, instructions, and publications.
Ordering tax forms, instructions, and publications.
Go to IRS.gov/OrderForms to order current forms,
instructions, and publications; call 800-829-3676 to order
prior-year forms and instructions. The IRS will process
your order for forms and publications as soon as possible.
Don’t resubmit your requests you’ve already sent us. You
can get forms and publication faster online.
General Instructions
Purpose of Form
Use Form 990-T and Schedule A (as applicable) to:
• Report unrelated business income;
• Figure and report unrelated business income tax
liability;
• Report proxy tax liability;
• Claim a refund of income tax paid by a regulated
investment company (RIC) or a real estate investment
trust (REIT), on undistributed long-term capital gain;
• Request a credit for certain federal excise taxes paid
for small employer health insurance premiums paid,
and
• Make an elective payment election under section 48D
or section 6417.
Who Must File
Organizations With Current Unrelated Business
Taxable Income (UBTI)
• Any disregarded entity, domestic, or foreign
organization exempt under section 501(a), section
529(a), or section 529A(a), if it has gross income of
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Instructions for Form 990-T (2025)
$1,000 or more from a regularly conducted unrelated
trade or business (see Regulations section
1.6012-2(e)). Gross income is gross receipts minus
the cost of goods sold, (see Regulations section
1.61-3). For a discussion of cost of goods sold, see
Schedule A (Form 990-T), Part III. Cost of Goods
Sold, later.
Caution: The gross receipts from a gaming business
include all amounts wagered in games, not just the net
proceeds after payment of prizes and other expenses.
Cash prizes aren’t included in cost of goods sold, but
are reported on Schedule A, Part II, line 14, as other
deductions.
Caution: A disregarded entity, as described in
Regulations sections 301.7701-1 through 301.7701-3,
is treated as a branch or division of its parent
organization for federal tax purposes. Therefore,
financial information applicable to a disregarded entity
must be reported as the parent organization’s financial
information.
• Colleges and universities of states and other
governmental units, and subsidiary corporations
wholly owned by such colleges and universities that
have gross income of $1,000 or more from a regularly
conducted unrelated trade or business. However, a
section 501(c)(1) corporation that is an instrumentality
of the United States and both organized and exempt
from tax by an Act of Congress doesn’t have to file.
• Qualified tuition programs described under section
529 that have $1,000 or more of unrelated trade or
business gross income.
• Qualified ABLE programs described under section
529A that have $1,000 or more of unrelated trade or
business gross income.
• Trustees for the following trusts that have $1,000 or
more of unrelated trade or business gross income.
1. Individual retirement accounts (IRAs), including
traditional IRAs described under section 408(a).
2. Simplified employee pension IRAs (SEP IRAs)
described under section 408(k).
3. Savings incentive match plan for employees of
small employers IRAs (SIMPLE IRAs) described
under section 408(p).
4. Roth IRAs described under section 408A.
5. Coverdell education savings accounts (ESAs)
described under section 530.
6. Archer medical savings accounts (Archer MSAs)
described under section 220.
7. Health savings accounts (HSAs) described under
section 223.
Caution: Each account of a type listed above is treated
as a separate trust for unrelated business income tax
purposes (even if there is a single owner or beneficiary for
multiple accounts) and must have its own employer
identification number (EIN) if it will file Form 990-T to
report gross unrelated business taxable income of $1,000
or more. A custodian is treated as a trustee. See section
Instructions for Form 990-T (2025)
408(h). Individual retirement annuities, unlike IRAs, aren’t
subject to unrelated business income tax.
Tip: IRAs and other tax-exempt shareholders in a RIC or
REIT filing Form 990-T, only to obtain a refund of income
tax paid on undistributed long-term capital gains should
complete Form 990-T, as explained in IRAs and other
tax-exempt shareholders in a RIC or REIT, later.
Applicable Entities Making an Elective Payment
Election
Section 6417 allows applicable entities to make an
elective payment election to treat applicable credits as a
payment of tax. See T.D. 9988 available at IRS.gov/irb/
2024-15_IRB#TD-9988 for information and resources.
Applicable entities. An applicable entity is defined as
any of the following.
• An organization exempt from the tax imposed by
subtitle A by reason of subchapter F of chapter 1 of
subtitle A.
• The government of any U.S. territory or political
subdivision or instrumentality thereof.
• Any state, the District of Columbia, or a political
subdivision or instrumentality thereof.
• The Tennessee Valley Authority.
• An Indian tribal government or a subdivision or
instrumentality thereof.
• Any Alaska Native Corporation (as defined in section
3 of the Alaska Native Claims Settlement Act (43
U.S.C. 1602(m))).
• Any corporation operating on a cooperative basis that
is engaged in furnishing electric energy to persons in
rural areas.
Applicable credits. Applicable credits eligible for the
elective payment election include:
• Qualifying advanced energy project credit (Form
3468, Part III),
• Clean electricity investment credit (Form 3468, Part
V),
• Energy credit (Form 3468, Part VI),
• Advanced manufacturing production credit (Form
7207),
• Clean hydrogen production credit (Form 7210),
• Clean electricity production credit (Form 7211),
• Zero-emission nuclear power production credit (Form
7213, Part II),
• Clean fuel production credit (Form 7218),
• Renewable electricity production credit (Form 8835,
Part II),
• Credit for alternative fuel vehicle refueling property
credit (Form 8911, Part I),
• Carbon oxide sequestration credit (Form 8933), and
• Commercial clean vehicle credit (Form 8936, Part V).
Note: Go to IRS.gov/ElectivePay, and refer to Elective
pay and transferability frequently asked questions 13 and
14 for more specific information regarding eligibility.
Pre-filing registration requirement. Before you file
Form 990-T, if you intend to make an elective payment
election for one or more applicable credits, you must
complete a pre-filing registration for each property or
facility. To register, go to IRS.gov/credits-deductions/
3
register-for-elective-payment-or-transfer-of-credits. See
Pub. 5884, Inflation Reduction Act (IRA) and CHIPS Act of
2022 (CHIPS) Pre-Filing Registration Tool. Also, see
Registering For and Making EPEs and Transfer Elections
in the Instructions for Form 3800.
Organizations With or Without Current UBTI
Elective payment election. Form 990-T filed by an
applicable entity making an elective payment election with
respect to one or more applicable credits, and eligible
taxpayers making an elective payment election with
respect to the advanced manufacturing investment credit
under section 48D must complete and attach Form 3800,
General Business Credit, as well as the required form(s)
on which you compute each individual credit. If filing Form
990-T solely to make the elective payment election, see
Elective payment election only under Which Parts to
Complete, later.
Proxy tax. Organizations liable for the proxy tax on
lobbying and political expenditures, see Part II, Line 3,
later, for a discussion of the proxy tax. If your organization
is only required to file because of the proxy tax, see Proxy
tax only under Which Parts To Complete, later.
Other taxes or amounts. Organizations that are liable
for other taxes (such as tax deferred under section 1291
(Form 990-T, Part II, line 4) or section 1294 (Form 990-T,
Part III, line 4)), or organizations liable for other amounts
due (or entitled to a refund of, or credit for other amounts),
see a discussion of these items, later. If your organization
is required to file Form 990-T only because of these taxes
or other amounts, see Other taxes under Which Parts To
Complete, later.
Qualified opportunity investment (annual report).
Organizations that deferred a capital gain into a qualified
opportunity fund (QOF) must file Form 990-T with the
applicable Schedule D, Form 8949, and Form 8997
attached. Each such organization must file Form 990-T
with Form 8997 attached annually until the organization
disposes of the investment. See the Instructions for Form
8997.
Tip: If you are filing Form 990-T for the limited purpose of
the elective payment election, because of the proxy tax,
other taxes, or only to claim a refund, go directly to
Elective payment election only, Proxy tax only, Other
taxes, or Claim for refund, later. If you are filing Form
990-T only to claim the credit for small employer health
insurance premiums, see the instructions for Part III,
Line 6f, later.
Which Parts To Complete
Organizations with unrelated business taxable income. Organizations with UBTI must complete Form
990-T, and also a separate Schedule A (Form 990-T) for
each separate unrelated trade or business. See
Regulations section 1.512(a)-6. Complete all Schedules A
(Form 990-T) first. See General Instructions Schedule A
(Form 990-T), later.
Consolidated returns. The consolidated return
provisions of section 1501 don’t apply to exempt
organizations, except for organizations having title holding
4
companies. If a title holding corporation described in
section 501(c)(2) pays any amount of its net income for a
tax year to an organization exempt from tax under section
501(a) (or would, except that the expenses of collecting its
income exceeded that income), and the corporation and
organization file a consolidated return as described below,
then treat the title holding corporation as being organized
and operated for the same purposes as the other exempt
organization (in addition to the purposes described in
section 501(c)(2)).
Two organizations exempt from tax under section
501(a), one a title holding company and the other earning
income from the first, will be includible corporations for
purposes of section 1504(a). If the organizations meet the
definition of an affiliated group and the other relevant
provisions of chapter 6, then these organizations may file
a consolidated return. The parent organization must
attach Form 851, Affiliations Schedule, to the consolidated
return. For the first year a consolidated return is filed or for
the first year a new corporation is added to a consolidated
return, the title holding company must attach Form 1122,
Authorization and Consent of Subsidiary Corporation To
Be Included in a Consolidated Income Tax Return. See
Regulations section 1.1502-100.
Organizations with no UBTI. An organization with no
UBTI that needs to file Form 990-T should complete and
file Form 990-T only. Such an organization does not
complete or attach Schedule A (Form 990-T) to its return.
Elective payment election only. Organizations that
are filing with regard to making an elective payment
election and have no unrelated business taxable income,
including applicable entities (as defined earlier) not
subject to federal income tax and not otherwise required
to file any annual tax or information return, must complete
the following lines of Form 990-T.
• The heading area above Part I, except items B, C, E, J,
K, and L.
• If the organization type in item G is “6417(d)(1)(A)
Applicable entity,” then in Part II, enter -0- and check
the box for “Tax rate schedule” on line 2 and enter -0on line 7.
• If the organization type in item G is “501(c)
corporation,” then in Part II, enter -0- on lines 1 and 7.
• If the organization type in item G is “501(c) trust,”
“401(a) trust,” or “Other trust” then in Part II, enter -0and check the box for “Tax rate schedule” on line 2
and enter -0- on line 7.
• If the organization type in item G is “State college/
university,” then in Part II, enter -0- on lines 1 and 7.
• Part III, lines 6g, 7, 10, and 11.
• Signature area.
In addition, complete and attach Form 3800, and all
forms required to compute each applicable credit. Refer to
the instructions for Form 3800 for more information.
Proxy tax only. Organizations that are required to file
Form 990-T, only because they are liable for the proxy tax
on lobbying and political expenditures, must complete the
following.
• The heading (above Part I) except items J and K.
• Part II, lines 1, 3, and 7.
• Part III.
• Signature area.
Instructions for Form 990-T (2025)
• Attach a statement showing the proxy tax
When, Where, and How to File
Other taxes. Organizations that are required to file
Form 990-T only because they are liable for tax under
section 1291 or tax previously deferred under section
1294, recapture taxes, the tax on a hospital organization’s
non-compliant facility income, or other items listed in the
instructions for Part III, line 4, must complete the following.
• The heading above Part I except items J and K.
• The applicable lines of Parts II and III.
• Signature area.
• Attach all appropriate forms and/or schedules showing
the computation of the applicable tax or taxes.
When To File
computation.
Other amounts due. Organizations that are required
to file Form 990-T, only because they are liable for
amounts due because of the recapture of a tax credit, or
other items listed in the instructions for Part III, line 3, must
complete the following.
• The heading above Part I except items J and K.
• The applicable lines of Parts II and III.
• Signature area.
• Attach all appropriate forms and/or schedules showing
the computation of the applicable tax or taxes.
Claim for refund (including special instructions for
IRA trustees or direct payments of certain credits). If
your only reason for filing a Form 990-T is to claim a
refund or request a credit, complete the following.
• The heading above Part I except items J and K.
• Enter -0- on Part I, lines 1 and 11, and Part III, line 4.
• Enter the credit or payment on Part III, lines 6a through
6g, as appropriate.
• Part III, lines 7, 10, and 11.
• Signature area.
For claims described below, follow the additional
instructions for that claim.
IRAs and other tax-exempt shareholders in a RIC or
REIT. If you are an IRA or other tax-exempt shareholder
that is invested in a RIC or a REIT and file Form 990-T
only to obtain a refund of income tax paid on undistributed
long-term capital gains, follow the steps under Claim for
refund (including special instructions for IRA trustees or
direct payments of certain credits), above; check the
applicable box in item H at the top of Form 990-T; and
attach Copy B of Form 2439, Notice to Shareholder of
Undistributed Long-Term Capital Gains.
Composite Form 990-T. If you are a trustee of more
than one IRA invested in a RIC, you may be able to file a
composite Form 990-T to claim a refund of tax under
section 852(b) instead of filing a separate Form 990-T for
each IRA. See Notice 90-18, 1990-1 C.B. 327, for
information on who can file a composite return. Complete
the steps under Claim for refund (including special
instructions for IRA trustees or direct payments of certain
credits), earlier, and follow the additional requirements in
the notice.
Backup withholding. If your only reason for filing Form
990-T is to claim a refund of backup withholding, complete
the steps under Claim for refund (including special
instructions for IRA trustees or direct payments of certain
credits), earlier, and attach a copy of the Form 1099
showing the withholding.
Instructions for Form 990-T (2025)
15th day of 4th month or 15th day of 5th month. An
employees’ trust defined in section 401(a), an IRA
(including SEPs and SIMPLEs), a Roth IRA, a Coverdell
ESA, or an Archer MSA must file Form 990-T by the 15th
day of the 4th month after the end of its tax year. All other
organizations must file Form 990-T by the 15th day of the
5th month after the end of their tax years. If the regular
due date falls on a Saturday, Sunday, or legal holiday, file
no later than the next business day. If the return is filed
late, see Interest and Penalties, later.
Extensions. Filers may request an automatic extension
of time to file Form 990-T by using Form 8868, Application
for Extension of Time To File an Exempt Organization
Return or Excise Taxes Related to Employee Benefits
Plans.
Caution: An elective payment election must be made on
a return filed by the due date for the return, including
extensions. All entities filing Form 990-T must use Form
8868 to request an extension of time to file Form 990-T.
Amended return. To correct errors or change a
previously filed return, check the “Amended return” box in
item F, in the heading area of the form. Also, in Part V,
Supplemental Information, include a statement that
indicates the line numbers on the original return that were
amended and give the reason for each amendment.
Generally, the amended return must be filed within 3
years after the date the original return was due or 3 years
after the date the organization filed it, whichever is later.
Where and How To File
Required electronic filing. If you are an organization or
trust defined in section 511 and need to file Form 990-T,
you are required to file electronically. For additional
information, visit IRS.gov/EOefile.
If you are an applicable entity that is not an organization
or trust defined in section 511, and you are filing Form
990-T to make an elective payment election, electronic
filing is encouraged but not required. If filing a paper
return, file Form 990-T at the following address.
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
Estimated Tax Payments
Generally, an organization filing Form 990-T must make
installment payments of estimated tax if its estimated tax
(tax minus allowable credits) is expected to be $500 or
more. Don’t include the proxy tax when computing your
estimated tax liability for 2025.
Depository Method of Tax Payment
The organization must pay any tax due in full by the due
date of the return without extension.
Electronic deposit requirement. The organization must
deposit all depository taxes (such as employment tax,
5
excise tax, and corporate income tax) electronically.
Generally, electronic funds transfers are made using the
Electronic Federal Tax Payment System (EFTPS). For
more information about EFTPS or to enroll in EFTPS, go
to IRS.gov/EFTPS, or call 800-555-4477. To contact
EFTPS using Telecommunications Relay Services (TRS)
for people who are deaf, hard of hearing, or have a speech
disability, dial 711 and then provide the TRS assistant the
800-555-4477 number above or 800-733-4829. Also, see
Pub. 966, Electronic Federal Tax Payment System: A
Guide to Getting Started.
Depositing on time. For EFTPS deposits to be made
timely, the organization must submit the deposit by 8 p.m.
Eastern time the day before the deposit is due.
Same-day wire payment option. If you fail to submit a
deposit transaction on EFTPS by 8 p.m. Eastern time the
day before the date a deposit is due, you can still make
your deposit on time by using the Federal Tax Application
(FTA), a same-day federal tax payment system that works
in conjunction with EFTPS. Make arrangements with your
financial institution ahead of time, noting the institution’s
availability, deadlines, and costs. To learn more, go to
IRS.gov/SameDayWire.
Timeliness of deposits. The IRS will use business days
to determine the timeliness of deposits. Business days are
any day that isn’t a Saturday, Sunday, or legal holiday.
Interest and Penalties
Your organization may be subject to interest and penalty
charges if it files a late return or fails to pay tax when due.
Generally, the organization isn’t required to include
interest and penalty charges on Form 990-T because the
IRS can figure the amount and bill the organization for it.
Interest. Interest is charged on taxes not paid by the
original due date of the return even if the organization
uses Form 8868 to request an automatic extension of time
to file. Interest is also charged on penalties imposed for
failure to file, negligence, fraud, substantial valuation
misstatements, and substantial understatements of tax
from the due date (including extensions) to the date of
payment. The interest charge is figured at the
underpayment rate determined under section 6621.
Late filing of return. An organization that fails to file its
return when due (including extensions of time for filing) is
subject to a penalty of 5% of the unpaid tax for each
month or part of a month the return is late, up to a
maximum of 25% of the unpaid tax. The minimum penalty
for a return that is more than 60 days late is the smaller of
the tax due or $525. The penalty won’t be imposed if the
organization can show that the failure to file on time was
due to reasonable cause. If you receive a notice about a
penalty after you file this return, reply to the notice with an
explanation and we will determine if you meet
reasonable-cause criteria. Don’t include an explanation
when you file your return.
Late payment of tax. The penalty for late payment of
taxes is usually 1/2 of 1% of the unpaid tax for each month
or part of a month the tax is unpaid. The penalty can’t
exceed 25% of the unpaid tax. If you receive a notice
about a penalty after you file this return, reply to the notice
with an explanation and we will determine if you meet
6
reasonable-cause criteria. Don’t include an explanation
when you file your return.
Estimated tax penalty. An organization that doesn’t
make estimated tax payments when due may be subject
to an underpayment penalty for the period of
underpayment. Generally, an organization is subject to
this penalty if its tax liability for the tax year is $500 or
more and it didn’t make estimated tax payments of at least
the smaller of its tax liability for the tax year or 100% of the
prior year’s tax. See section 6655 for details and
exceptions.
Trust fund recovery penalty. This penalty may apply if
certain excise, income, social security, and Medicare
taxes that must be collected or withheld aren’t paid to the
U.S. Treasury. These taxes are generally reported on:
• Form 720, Quarterly Federal Excise Tax Return;
• Form 941, Employer’s QUARTERLY Federal Tax
Return;
• Form 943, Employer’s Annual Federal Tax Return for
Agricultural Employees; or
• Form 945, Annual Return of Withheld Federal Income
Tax.
The trust fund recovery penalty may be imposed on all
persons who are determined by the IRS to have been
responsible for collecting, accounting for, and paying over
these taxes, and who acted willfully in not doing so. The
penalty is equal to the unpaid trust fund tax. See the
Instructions for Form 720; or Pub. 15 (Circular E),
Employer’s Tax Guide, for details, including the definition
of responsible persons.
Other penalties. There are also penalties that can be
imposed for negligence, substantial understatement of
tax, reportable transaction understatements, and fraud.
See sections 6662, 6662A, and 6663.
Other Forms That May Be Required
Forms W-2 and W-3. File Form W-2, Wage and Tax
Statement, and Form W-3, Transmittal of Wage and Tax
Statements, to report wages, tips, other compensation,
withheld income taxes, and withheld social security/
Medicare taxes for employees.
Form 461. Noncorporate taxpayers may need to file
Form 461, Limitation on Business Losses. See Form 461
and its instructions.
Form 720. File Form 720, Quarterly Federal Excise Tax
Return, to report environmental excise taxes,
communications and air transportation taxes, fuel taxes,
manufacturers taxes, ship passenger tax, and certain
other excise taxes. See Trust fund recovery penalty,
earlier.
Form 926. File Form 926, Return by a U.S. Transferor of
Property to a Foreign Corporation, if the organization is
required to report certain transfers to foreign corporations
under section 6038B.
Form 940. File Form 940, Employer’s Annual Federal
Unemployment (FUTA) Tax Return, if the organization is
liable for FUTA tax.
Form 941 and Form 943. File Form 941, Employer’s
QUARTERLY Federal Tax Return; or Form 943,
Instructions for Form 990-T (2025)
Employer’s Annual Federal Tax Return for Agricultural
Employees, to report income tax withheld, and employer
and employee social security and Medicare taxes. Also,
see Trust fund recovery penalty, earlier.
Form 945. File Form 945, Annual Return of Withheld
Federal Income Tax, to report income tax withheld from
nonpayroll distributions or payments, including pensions,
annuities, IRAs, gambling winnings, and backup
withholding.
Form 965-A and Form 965-B. See Form 965-A,
Individual Report of Net 965 Tax Liability; Form 965-B,
Corporate and Real Estate Investment Trust (REIT) Report
of Net 965 Tax Liability and Electing REIT Report of 965
Amounts; and their respective instructions, for more
information.
Form 1098. File Form 1098, Mortgage Interest
Statement, to report the receipt from any individual of
$600 or more of mortgage interest (including points) in the
course of the organization’s trade or business and
reimbursements of overpaid interest.
Forms 1099-A, B, DIV, INT, LTC, MISC, NEC, OID, R, S,
and SA. Organizations engaged in an unrelated trade or
business may be required to:
• File an information return on Forms 1099-A, B, DIV,
INT, LTC, MISC, NEC, OID, R, S, and SA;
• Report acquisitions or abandonments of secured
property through foreclosure;
• Report proceeds from broker and barter exchange
transactions;
• Report certain dividends and distributions;
• Report interest income;
• Report certain payments made on a per diem basis
under a long-term care insurance contract, and certain
accelerated death benefits;
• Report miscellaneous income (such as payments to
providers of health and medical services, and
miscellaneous income payments);
• Report nonemployee compensation;
• Report original issue discount;
• Report distributions from retirement or profit-sharing
plans, IRAs, SEPs, SIMPLEs, and insurance
contracts;
• Report proceeds from real estate transactions; and
• Report distributions from an HSA, an Archer MSA, or
a Medicare Advantage MSA.
Form 4466. File Form 4466, Corporation Application for
Quick Refund of Overpayment of Estimated Tax, to apply
for a quick refund if the organization overpaid its estimated
tax for the year by at least 10% of its expected income tax
liability and at least $500.
Form 5498. File Form 5498, IRA Contribution
Information, to report contributions (including rollover
contributions) to any IRA, including a SEP, SIMPLE, or
Roth IRA, and to report Roth IRA conversions, IRAs, and
the fair market value (FMV) of the account.
Form 5498-ESA. File Form 5498-ESA, Coverdell ESA
Contribution Information, to report contributions (including
rollover contributions) to a Coverdell ESA.
Form 5498-SA. File Form 5498-SA, HSA, Archer MSA,
or Medicare Advantage MSA Information, to report
Instructions for Form 990-T (2025)
contributions to an HSA or Archer MSA, and the FMV of
an HSA, an Archer MSA, or a Medicare Advantage MSA.
See the Instructions for Forms 1099-SA and 5498-SA.
Form 5713. File Form 5713, International Boycott Report,
if the organization had operations in, or related to, certain
boycotting countries.
Form 5884-C. File Form 5884-C, Work Opportunity
Credit for Qualified Tax-Exempt Organizations Hiring
Qualified Veterans, to claim the work opportunity credit for
qualified first-year wages paid to qualified veterans who
began working for the organization on or after November
22, 2011, and before January 1, 2026.
Form 5884-D. File Form 5884-D, Employee Retention
Credit for Certain Tax-Exempt Organizations Affected by
Qualified Disasters, to claim the employee retention credit
against certain payroll taxes if activities of the organization
became inoperable because of damage from a qualified
disaster. See the Instructions for Form 5884-D for more
information.
Form 6198. File Form 6198, At-Risk Limitations, if the
organization has a loss from an at-risk activity conducted
as a trade or business or for the production of income.
Forms 8275 and 8275-R. Taxpayers and income tax
return preparers file Form 8275, Disclosure Statement,
and Form 8275-R, Regulation Disclosure Statement, to
disclose items or positions taken on a tax return or that are
contrary to Treasury regulations (to avoid parts of the
accuracy-related penalty or certain preparer penalties).
Form 8300. File Form 8300, Report of Cash Payments
Over $10,000 Received in a Trade or Business, if the
organization received more than $10,000 in cash or
foreign currency in one transaction or in a series of related
transactions. See Form 8300, Instructions for Form 8300,
and Regulations section 1.6050I-1(c).
Form 8582. File Form 8582, Passive Activity Loss
Limitations, for trusts that have losses (including prior-year
unallowed losses) from passive activities.
Form 8697. File Form 8697, Interest Computation Under
the Look-Back Method for Completed Long-Term
Contracts, to figure the interest due or to be refunded
under the look-back method of section 460(b)(2). The
look-back method applies to certain long-term contracts
that are accounted for under either the percentage
method or the completion-capitalized cost method.
Form 8810. File Form 8810, Corporate Passive Activity
Loss and Credit Limitations, for closely held corporations
that have losses or credits (including prior-year unallowed
losses and credits) from passive activities.
Form 8865. File Form 8865, Return of U.S. Persons With
Respect to Certain Foreign Partnerships, if the
organization:
1. Controlled a foreign partnership (that is, owned more
than a 50% direct or indirect interest in the
partnership);
2. Owned at least a 10% direct or indirect interest in a
foreign partnership while U.S. persons controlled that
partnership;
7
3. Had an acquisition, disposition, or change in
proportional interest in a foreign partnership that:
a. Increased its direct interest to at least 10% or
reduced its direct interest of at least 10% to less
than 10%;
b. Changed its direct interest by at least a 10%
interest; or
4. Contributed property to a foreign partnership in
exchange for a partnership interest if:
a. Immediately after the contribution, the
organization directly or indirectly owned at least a
10% interest in the foreign partnership; or
b. The FMV of the property the organization
contributed to the foreign partnership in exchange
for a partnership interest, when added to other
contributions of property made to the foreign
partnership by the organization or a related person
during the preceding 12-month period, exceeds
$100,000.
Also, the organization may have to file Form 8865 to
report certain dispositions by a foreign partnership of
property it previously contributed to that foreign
partnership if it was a partner at the time of the disposition.
See Form 8865 and its separate instructions.
transaction is a listed transaction) for each failure to file
Form 8886 with its return or for failure to provide a copy of
Form 8886 to the Office of Tax Shelter Analysis (OTSA).
Other penalties, such as an accuracy-related penalty
under section 6662A, may also apply. See the Instructions
for Form 8886 for details.
Form 8899. File Form 8899, Notice of Income From
Donated Intellectual Property, to report income from
qualified intellectual property.
Form 8925. File Form 8925, Report of Employer-Owned
Life Insurance Contracts, which must be filed by every
applicable policyholder owning one or more
employer-owned life insurance contracts issued after
August 17, 2006.
Form 8975. Certain U.S. persons that are the ultimate
parent entity of a U.S. multinational enterprise group with
annual revenue for the preceding reporting period of $850
million or more are required to file Form 8975,
Country-by-Country Report. Form 8975 and its Schedules
A (Form 8975), Tax Jurisdiction and Constituent Entity
Information, must be filed with the income tax return of the
ultimate parent entity of a U.S. multinational enterprise
group for the tax year in or within which the reporting
period covered by Form 8975 ends. For more information,
see Form 8975, Schedule A (Form 8975), and the
Instructions for Form 8975 and Schedule A (Form 8975).
Form 8886. File Form 8886, Reportable Transaction
Disclosure Statement, to disclose information for each
reportable transaction in which the organization
participated. Form 8886 must be filed for each tax year
that the federal income tax liability of the organization is
affected by its participation in the transaction. The
organization may have to pay a penalty if it is required to
file Form 8886 but doesn’t do so. The following are
reportable transactions.
• Any listed transaction that is the same as, or
substantially similar to, tax avoidance transactions
identified by the IRS.
• Any transaction offered under conditions of
confidentiality for which the organization paid an
advisor a fee of at least $250,000.
• Certain transactions for which the organization has
contractual protection against disallowance of the tax
benefits.
• Any transaction resulting in a loss of at least $10
million in any single year or $20 million in any
combination of years.
• Certain transactions identified by the IRS in published
guidance as a “transaction of interest” (a transaction
that the IRS believes has a potential for tax avoidance
or evasion, but hasn’t yet been identified as a listed
transaction).
Form 8978. File Form 8978, Partner’s Additional
Reporting Year Tax, to report adjustments shown on Form
8986, Partner’s Share of Adjustment(s) to
Partnership-Related Item(s), received from a partnership
that has elected to push out adjustments to
partnership-related items to their partners.
Form 8886-T. File Form 8886-T, Disclosure by
Tax-Exempt Entity Regarding Prohibited Tax Shelter
Transaction, to disclose information with respect to each
prohibited tax shelter transaction to which the organization
is a party.
Penalties. The organization may have to pay a penalty
if it is required to disclose a reportable transaction under
section 6011 and fails to properly complete and file Form
8886. The penalty is $50,000 ($200,000 if the reportable
Form 8994. File Form 8994, Employer Credit for Paid
Family and Medical Leave, to figure the employer credit for
paid leave.
8
Form 8990. File Form 8990, Limitation on Business
Interest Expense Under Section 163(j), to claim a
deduction for business interest unless the taxpayer meets
certain specified exceptions. Also, Form 8990 must be
filed by any taxpayer that owns an interest in a partnership
with current-year or prior-year carryover excess business
interest expense allocated from the partnership.
Form 8991. File Form 8991, Tax on Base Erosion
Payments of Taxpayers With Substantial Gross Receipts,
for any corporation, other than a RIC, a REIT, or an S
corporation, that has aggregate gross receipts of at least
$500 million in 1 or more of the 3 preceding tax years
ending with the preceding tax year.
Form 8993. File Form 8993, Section 250 Deduction for
Foreign-Derived Intangible Income (FDII) and Global
Intangible Low-Taxed Income (GILTI), for the allowance of
a deduction for the eligible percentage of FDII. The
deduction is allowed only to domestic corporations (not
including REITs, RICs, and S corporations).
Form 8995. Refer to Form 8995, Qualified Business
Income Deduction Simplified Computation, if you are a
trust filing Form 990-T and have unrelated business
income, to determine if you have qualified business
Instructions for Form 990-T (2025)
income (QBI) and may be allowed a QBI deduction under
section 199A.
Form 8995-A. Refer to Form 8995-A, Qualified Business
Income Deduction. Use this form to figure your qualified
business income deduction. Use the separate Schedules
A, B, C, and/or D, of Form 8995-A, as appropriate, to help
calculate the deduction.
Form 8997. File Form 8997, Initial and Annual Statement
of Qualified Opportunity Fund (QOF) Investments,
annually to report investments held in a QOF at any time
during the year. See the instructions for Form 8997.
Accounting Methods
An accounting method is a practice a taxpayer follows to
determine the year in which to report revenue and
expenses for federal income tax purposes. An accounting
method includes not only the overall plan of accounting for
gross income or deductions (for example, an accrual
method or the cash receipts and disbursement method),
but also the treatment of an item used in such overall plan.
However, a practice that does not affect the timing for
reporting an item of income or deduction for purposes of
determining taxable income is not an accounting method.
A taxpayer, including a tax-exempt entity, adopts any
permissible accounting method in the first year in which it
uses the method in determining its taxable income. See
Rev. Proc. 2015-13, 2015-5 I.R.B. 419 as modified by Rev.
Proc. 2021-34, 2021-35 I.R.B. 337, section 9 of Rev. Proc.
2025-1, 2025-1 I.R.B. 1, and any successors.
Caution: An exempt organization may adopt an
accounting method not only for purposes of calculating
taxable income, but also for purposes of determining
whether taxable income will be subject to federal income
tax. For example, a tax-exempt entity may adopt an
accounting method for an item of income from an
unrelated trade or business activity even if the gross
income from the activity is less than $1,000 and is
therefore not taxed for federal income tax purposes
pursuant to Regulations section 1.6012-2(e).
An accounting method for an item of income or
deduction may generally be adopted separately for each
of the taxpayer’s trades or businesses. However, in order
to be permissible, an accounting method must clearly
reflect the taxpayer’s income. Unless instructed otherwise,
the organization should generally use the same
accounting method on the Form 990-T and all schedules
to report revenue and expenses that it regularly uses to
keep its books and records.
Accounting method change. Once a taxpayer,
including a tax-exempt entity, adopts an accounting
method for federal income tax purposes, the taxpayer
must generally request the IRS consent before it can
change its accounting method (even if the year in which
the taxpayer seeks to make the change is a year in which
it generates only tax-exempt income or is otherwise not
taxed on its taxable income). In most cases, a taxpayer
requests consent to change an accounting method by
filing Form 3115, Application for Change in Accounting
Method. See Rev. Proc. 2015-13, or any successor, for
general procedures for obtaining consent to change an
accounting method. See the Instructions for Form 3115
Instructions for Form 990-T (2025)
and Pub. 538 for more information and exceptions. See
Rev. Proc. 2021-34 for additional procedures that may
apply for obtaining automatic consent to change methods
of accounting for revenue recognition and certain other
methods of accounting that may affect the accounting for
revenue recognition. Also, see Rev. Proc. 2022-09 for
additional procedures that may apply for obtaining
automatic consent to change certain methods of
accounting related to small businesses.
Depending on the specific accounting method change
being requested, the taxpayer may be able to request
automatic consent. This means that, as long as the
taxpayer follows the applicable procedures, the taxpayer
does not have to wait for formal approval by the IRS before
applying the new accounting method. See Rev. Proc.
2022-14, 2022-7 I.R.B. 502 available at IRS.gov/irb/
2022-07_IRB#REV-PROC-2022-14, for the list of
automatic changes for 2022; as modified by Rev. Proc.
2022-23; 2022-18 I.R.B. 1052, available at IRS.gov/irb/
2022-18_IRB#REV-PROC-2022-23, which provides
guidance allowing late elections under sections 168(j)(8)
and 168(l)(3)(D), and a late election under section 181(a)
(1), for a list of accounting method changes that may
qualify for automatic consent.
For example, a tax-exempt entity that has adopted an
accounting method for an item of income from an
unrelated trade or business must generally request
consent before it can change its method of accounting for
that item in any subsequent year. This is true regardless of
whether gross income from the unrelated trade or
business is $1,000 or more in such subsequent year.
Alternatively, if a taxpayer, including a tax-exempt entity,
has not yet adopted an accounting method for an item of
income or deduction, a change in how the entity reports
the item isn’t a change in accounting method. In this case,
the procedures applicable to requests for accounting
method changes (for example, the requirement to file
Form 3115) are not applicable. See Rev. Proc. 2015-13 for
the definition of what constitutes an accounting method
change.
Thus, a tax-exempt entity that has never taken into
account an item of income or deduction in determining
taxable income does not have to request consent to
change its method of reporting that item on its Form
990-T. Additionally, a tax-exempt entity that has never
been subject to federal income tax on an item of income
or deduction, but that is required to file a Form 990-T
solely due to owing a section 6033(e)(2) proxy tax, does
not have to request consent to change its method for
reporting the item.
Adjustments required when changing an
accounting method. A taxpayer, including a tax-exempt
entity, that changes its accounting method must generally
calculate and report an adjustment to ensure that no
portion of the item being changed is permanently omitted
or duplicated (see section 481(a)). However, depending
on the specific method change, the IRS may provide that
an adjustment isn’t required or permitted.
Caution: Generally, a taxpayer, including a tax-exempt
entity, will recognize a positive section 481(a) adjustment
(that is, an increase to income) ratably over 4 tax years
9
and will recognize a negative section 481(a) adjustment in
full in the year of change. See Rev. Proc. 2015-13 or its
successor.
An organization may elect a 1-year adjustment period
for a positive section 481(a) adjustment that is less than
$50,000. See the Instructions for Form 3115 for more
information and the requirements to make this election.
Include any positive section 481(a) adjustment on
Schedule A (Form 990-T), Part I, line 12 (Other income). If
the section 481(a) adjustment is negative, report it as a
deduction on Schedule A (Form 990-T), Part II, line 14
(Other deductions). The section 481(a) adjustment should
not be reported on Form 990-T as a negative number.
However, as discussed above, if a tax-exempt entity
has not yet adopted an accounting method for an item, a
change in how the entity reports the item for purposes of
filing the Form 990-T is not a change in accounting
method. In this case, an adjustment under section 481(a)
isn’t required or permitted.
Accounting Period
The return must be filed using the organization’s
established annual accounting period. If the organization
has no established accounting period, file the return on
the calendar-year basis.
Applicable entities such as state and local
governmental entities and Indian tribal governments that
have not established an annual accounting period for
purposes of filing a tax return should identify their annual
accounting period on their first Form 990-T.
Fiscal year. If the organization has established a fiscal
year accounting period, use the 2025 Form 990-T to
report on the organization’s fiscal year that began in 2025
and ended 12 months later. A fiscal year accounting
period should normally coincide with the natural operating
cycle of the organization. Be certain to indicate on the top
of page 1 of Form 990-T the date the organization’s fiscal
year began in 2025, and the date the fiscal year ended in
2026.
Accounting period change. To change an accounting
period, some organizations may make a notation on a
timely filed Form 990, 990-EZ, 990-PF, or 990-T. Others
may be required to file Form 1128, Application To Adopt,
Change, or Retain a Tax Year. For details on which
procedure applies to your organization, see Rev. Proc.
85-58, 1985-2 C.B. 740 (for certain organizations exempt
under section 501(a)), and Rev. Proc. 2025-6, 2025-6
I.R.B. 713, available at IRS.gov/irb/2025-06_IRB#REVPROC-2025-6 (for certain applicable entities, as defined
in section 6417(d)(1)(A)). Also, see the Instructions for
Form 1128.
Short period. For the short-period return, figure the tax
by placing the organization’s taxable income on an annual
basis. If the organization changes its accounting period,
file Form 990-T for the short period that begins with the
first day after the end of the old tax year and ends on the
day before the first day of the new tax year. For details,
see section 443.
10
Reporting 990-T Information on Other
Returns
Your organization may be required to file an annual
information return on:
• Form 990, Return of Organization Exempt From
Income Tax;
• Form 990-EZ, Short Form Return of Organization
Exempt From Income Tax;
• Form 990-PF, Return of Private Foundation or Section
4947(a)(1) Trust Treated as Private Foundation; or
• Form 5500, Annual Return/Report of Employee
Benefit Plan.
If so, include on that information return the unrelated
business gross income and expenses (but not including
the specific deduction claimed on Part I, line 8, or any
expense carryovers from prior years) reported on Form
990-T for the same tax year.
Rounding Off to Whole Dollars
You may round off cents to whole dollars on the
organization’s return and schedules. If you do round to
whole dollars, you must round all amounts. To round, drop
amounts under 50 cents and increase amounts from 50 to
99 cents to the next dollar. For example, $1.39 becomes
$1 and $2.50 becomes $3. If you have to add two or more
amounts to figure the amount to enter on a line, include
cents when adding the amounts and round off only the
total. If you are entering amounts that include cents, make
sure to include the decimal point. There is no cents
column on the form.
Public Inspection Requirements of
Section 501(c)(3) Organizations
Under section 6104(d), a section 501(c)(3) organization
that files Form 990-T must make its entire annual exempt
organization business income tax return (including
amended returns) available for public inspection. See
Appendix C. Public Inspection of Form 990-T Returns
Filed by Section 501(c)(3) Organizations, later.
Specific Instructions
Period Covered
File the 2025 form for calendar year 2025 or a fiscal year
beginning in 2025 and ending in 2026. For a fiscal year, fill
in the tax year information at the top of the form.
The 2025 Form 990-T may also be used if:
• The organization has a tax year of less than 12
months that begins and ends in 2026, and
• The 2026 Form 990-T isn’t available at the time the
organization is required to file its return. The
organization must show its 2026 tax year on the 2025
Form 990-T and take into account any tax law
changes that are effective for tax years beginning after
2025.
Name and Address
The name and address on Form 990-T should be the
same as the name and address shown on other Forms
990.
Instructions for Form 990-T (2025)
If the post office doesn’t deliver mail to the street
address and the organization has a P.O. box, show the
box number instead of the street address.
Enter the room, suite, or other unit number in the
applicable box.
If the organization receives its mail in care of a third
party (such as an accountant or an attorney), enter on the
street address line “C/O” followed by the third party’s
name and street address or P.O. box.
Caution: Change of name. If the organization has
changed its name, it must check the box next to “Name of
organization” and also provide the following when filing
this return, if it is:
• A corporation, is incorporated with the state or limited
liability company treated as a corporation for tax
purposes (that is, not a disregarded entity)—an
amendment to the articles of incorporation or articles
of organization along with proof of filing with the state;
• A trust—an amendment to the trust agreement with
the trustee(s) signature; or
• An association, or an unincorporated association—an
amendment to the articles of association, constitution,
by-laws, or other organizing document with signatures
of at least two officers/members.
Items A through L
Item A. If the organization has changed its address since
it last filed a return, check item A.
Tip: If a change in address occurs after the return is filed,
use Form 8822-B, Change of Address or Responsible
Party—Business, to notify the IRS of the new address.
Item B. Check the applicable box for which the
organization receives its tax exemption.
Qualified pension, profit-sharing, and stock bonus
plans should check the box for “501” and enter “a”
between the first set of parentheses. Do not make an entry
in the space between the second set of parentheses.
For other organizations exempt under section 501,
check the box for “501” and enter the section that
describes their tax-exempt status, for example, 501(c)(3).
For tax-exempt organizations that don’t receive their
exemption under section 501, use the following guide.
IF you are a . . .
THEN check this box . . .
IRA, SEP, or SIMPLE
408(e).
Roth IRA
408A.
Archer MSA
220(e).
Coverdell ESA
530(a).
Qualified State Tuition Program
529(a).
Qualified ABLE Program
529A.
Public colleges and universities that have not obtained
recognition of exemption under section 501(c)(3), and
section 6417(d)(1)(A) applicable entities that are not
described in section 501(a) should not check any box in
item B.
Instructions for Form 990-T (2025)
Item C. Enter the total of the end-of-year assets from the
organization’s books of account.
Item D. Every organization or entity filing Form 990-T
must have its own employer identification number (EIN).
An employees’ trust described in section 401(a) and
exempt under section 501(a) should enter its own trust
identification number.
An IRA trust enters its own EIN. An IRA trust never
enters a social security number (SSN) or the trustee’s EIN.
Caution: No organization or other entity should use
the EIN of any other organization or entity.
Apply for an EIN. An EIN may be applied for in one of
the following ways.
• Online by going to IRS.gov/EIN. The EIN is issued
immediately once the application information is
validated.
• By mailing or faxing Form SS-4, Application for
Employer Identification Number.
Note: Only organizations located in the United States or
U.S. territories can use the online application. Foreign
organizations must use one of the other methods to apply
for an EIN.
Item E. If the organization is covered by a group
exemption, enter the group exemption number.
Item F. Check this box if the organization previously filed
a Form 990-T return with the IRS for a tax year and is now
filing another return for the same tax year to amend the
previously filed return. Also, see Amended return, earlier,
for information you must include in an amended return.
Item G. Check the box that describes your organization.
Check the box for “6417(d)(1)(A) Applicable entity” only
if no other checkbox on this line applies. For example, a
rural electric cooperative exempt under section 501(c)(12)
should check the box for “501(c) corporation” or “501(c)
trust,” (as the case may be). Similarly, a public college or
university should check the box for “State college/
university” even if it is filing Form 990-T solely with regard
to an elective payment election.
“Other trust” includes IRAs, SEPs, SIMPLEs, Roth
IRAs, Coverdell ESAs, and Archer MSAs.
Section 529 organizations check the box for “501(c)
corporation” or “501(c) trust” depending on whether the
organization is a corporation or a trust. Also, the box for
“529(a)” in item B must be checked.
Caution: Compute your tax in Part II on the appropriate
line.
• If you check the box for “501(c) corporation,” you must
compute your tax on Part II, line 1, and leave line 2
blank.
• If you check the box for “501(c) trust,” “401(a) trust,” or
“Other trust,” you must compute your tax on Part II,
line 2, and leave line 1 blank.
• If you check the box for “6417(d)(1)(A) Applicable
entity” and are filing Form 990-T solely to make the
elective payment election, enter -0- in Part II, line 2,
and check the box for “Tax rate schedule.”
11
Item H. Check the applicable box if filing Form 990-T only
to claim a credit from Form 8941, to claim a refund shown
on Form 2439, or to claim the elective payment election
amount from Form 3800.
Item I. Check the box if you are a 501(c)(3) organization
filing a consolidated return with a 501(c)(2) title holding
corporation. See Consolidated returns, earlier, for
additional information.
Item J. Enter the total number of Schedules A (Form
990-T) attached to Form 990-T. An organization with one
or more unrelated trades or businesses will complete a
separate Schedule A (Form 990-T) for each unrelated
trade or business.
Tip: Complete all needed Schedules A (Form 990-T)
before completing Parts I through V of Form 990-T.
Item K. Check “Yes” if your organization is a corporation
and either (1) or (2) below applies.
1. The corporation is a subsidiary in an affiliated group
(defined in section 1504) but isn’t filing a consolidated
return for the tax year with that group.
2. The corporation is a subsidiary in a parent-subsidiary
controlled group (defined in section 1563).
Excluded member. If the corporation is an excluded
member of a controlled group (see section 1563(b)(2)), it
is still considered a member of a controlled group for
purposes of item K.
Item L. Enter the name and address of the person who
has the organization’s books and records and the
telephone number where they can be reached.
Part I. Total Unrelated Business
Taxable Income
Total of Unrelated Business Taxable Income
Computed From All Unrelated Trades or
Businesses
Line 1. Enter the sum of the positive amounts from all
Schedules A (Form 990-T), Part II, line 18. Don’t include
any amount from Schedule A (Form 990-T), Part II, line 18,
that is less than zero in the computation of total unrelated
trade or business income reported on Part I, line 1.
Line 2. Reserved. Do not enter any amount on this line.
Charitable Contributions
Line 4. Enter contributions or gifts actually paid within the
tax year to or for the use of charitable and governmental
organizations described in section 170(c). Also, enter any
unused contributions carried over from earlier years. The
deduction for contributions will be allowed whether or not
directly connected with the conduct of a trade or business.
See Appendix B. Charitable Contribution Deduction, later.
Deductions for Net Operating Loss Arising in
Tax Years Beginning Before 2018
Line 6. Enter the smaller of (a) the amount of net
operating loss (NOL) arising in tax years beginning before
January 1, 2018, or (b) the amount shown on Part I, line 1.
12
Specific Deduction
Line 8. A specific deduction of $1,000 is allowed except
for computing the NOL and the net operating loss
deduction under section 172.
Only one specific deduction may be taken, regardless
of the number of unrelated businesses conducted.
However, a diocese, province of a religious order, or
convention or association of churches is allowed one
specific deduction for each parish, individual church,
district, or other local unit that regularly conducts an
unrelated trade or business. This applies only to those
parishes, districts, or other local units that aren’t separate
legal entities but are components of a larger entity
(diocese, province, convention, or association). Each
specific deduction will be the smaller of $1,000 or the
gross income from any unrelated trade or business the
local unit conducts. If you claim a total specific deduction
larger than $1,000, you must attach a statement showing
how you figured the amount. The attached statement
should include the name of each local unit, its gross
unrelated business income, and its allowable specific
deduction (which can’t exceed the smaller of $1,000 or
the local unit’s gross unrelated business income).
The diocese, province of a religious order, or
convention or association of churches must file a return
reporting the gross income and deductions of all its units
that aren’t separate legal entities. These local units can’t
file separate returns because they aren’t separately
incorporated. Local units that are separately incorporated
must file their own returns and can’t be included with any
other entity except for a title holding company. See
Consolidated returns, earlier.
For details on the specific deduction, see section
512(b)(12) and the related regulations.
Section 199A Deduction
For trust filers only. If you are a trust filing Form 990-T
and have unrelated business income, you may have
qualified business income (QBI) and may be allowed a
QBI deduction under section 199A.
Refer to the instructions for Form 8995, or Form
8995-A, (as applicable) to determine whether you meet
the requirements for the QBI deduction and how to
complete the applicable form.
Line 9. For purposes of calculating the QBI deduction,
the taxable income before the QBI deduction is the
amount reported on Part I, line 7, minus the amount
reported on Part I, line 8.
Note: The organization determines the unrelated
business income separately for each unrelated trade or
business, and the income for an unrelated trade or
business can’t be less than zero. Since a loss from an
unrelated trade or business isn’t included in the UBTI for
the tax year due to application of section 512(a)(6), when
calculating QBI, omit items of income, gain, deduction,
and loss from any unrelated trade or business that
operated at a loss. A loss from an unrelated trade or
business will be carried forward to future years when the
trust has income (or gain that is subject to unrelated
business income tax) from the same unrelated trade or
Instructions for Form 990-T (2025)
business and will be used in those years in calculating the
QBI. Additionally, W-2 wages and unadjusted basis
immediately after the acquisition of qualified property from
an unrelated trade or business that operated at a loss for
the current tax year aren’t used in calculating the limitation
on QBI for taxpayers over the threshold.
Part II. Tax Computation
Organizations Taxable as Corporations
Line 1. Multiply Part I, line 11, by 21% (0.21).
Trusts
Line 2. Trusts exempt under section 501(a), which
otherwise would be subject to subchapter J (estates,
trusts, etc.), are taxed at trust rates. This rule also applies
to employees’ trusts that qualify under section 401(a).
Most trusts figure the tax on the UBTI amount on Part I,
line 11, using the Tax Rate Schedule for Trusts, below. If
the tax rate schedule is used, enter the tax on Part II,
line 2, and check the box for “Tax rate schedule.” If the
trust is eligible for the rates on net capital gains and
qualified dividends, complete Schedule D (Form 1041)
and enter on Part II, line 2, the tax from Schedule D (Form
1041). Check the box for “Schedule D” on line 2 and
attach Schedule D (Form 1041) to Form 990-T.
Caution: A trust with more than one unrelated trade or
business that computes its tax on Schedule D (Form
1041) may need to adjust the amount entered on
Schedule D (Form 1041), Part V, line 22, to include only
the net gain from Schedule D (Form 1041), line 18a
(column 2), or line 19 (column 2), that is included in
income on Part I of Form 990-T.
Tax Rate Schedule for Trusts
If the amount on Part II, line 2, is:
Over—
$0
3,150
11,450
15,650
But not over—
$3,150
11,450
15,650
-----
Of the amount
over—
Tax is:
10%
$315 + 24%
2,307 + 35%
3,777 + 37%
$0
3,150
11,450
15,650
Proxy Tax
Line 3. To pay the section 6033(e)(2) proxy tax on
nondeductible lobbying and political expenditures, enter
the proxy tax on Part II, line 3, and attach a statement
showing the computation.
Exempt organizations, except section 501(c)(3) and
certain other organizations, must include certain
information regarding lobbying expenditures on Form 990.
In addition, organizations may have to provide notices to
members regarding their share of dues to which the
expenditures are allocable. See the Instructions for Form
990 and Rev. Proc. 98-19, 1998-1 C.B. 547, for
exceptions.
If the organization elects not to provide the notices
described earlier, it must pay the proxy tax described in
section 6033(e)(2). If the organization doesn’t include the
entire amount of allocable dues in the notices, it may have
to pay the proxy tax. This tax isn’t applicable to section
501(c)(3) organizations. Figure the proxy tax by
Instructions for Form 990-T (2025)
multiplying the aggregate amount not included in the
notices described earlier by 21%. No deductions are
allowed.
Other Tax Amounts
Line 4a. Enter the amount from Form 4255, Part I, line 3,
column (q).
Line 4b. Part II, line 4b, is intended to capture any
positive tax amount that doesn’t have a specific line. An
MeF (Internet filing) dependency (attachment) captures
the detail. Use line 4b to report tax amounts not reported
on a specific line in Part II (excluding tax deferred under
section 1294, which is included on Part III, line 4).
• Enter the base erosion minimum tax amount under
section 59A from Form 8991, Part IV, line 5e. Section
59A applies to base erosion payments paid or
accrued in tax years beginning after 2017. See the
Instructions for Form 8991 to determine if the
organization is an applicable taxpayer under section
59A(e), and, if the organization is an applicable
taxpayer, to determine the base erosion minimum tax
amount.
• Enter the tax and interest on a nonqualified withdrawal
from a capital construction fund (section 7518).
• Enter the deferred tax amount (defined in section
1291(c)(1)) that is the aggregate increase in taxes
(described in section 1291(c)(2)) on an excess
distribution from a passive foreign investment
company (PFIC) that is taxable as UBTI. See the
Instructions for Form 8621, Information Return by a
Shareholder of a Passive Foreign Investment
Company or Qualified Electing Fund.
• Enter the increase in tax attributable to a partner’s
audit liability. If your organization received Form 8986
from one or more partnerships that have elected to
push out adjustments to partnership-related items to
their partners, complete and attach Form 8978. See
the Instructions for Form 8978. Include any increase in
taxes due from Form 8978, line 14, on Part II, line 4b. If
Form 8978 shows a decrease in tax, do not report that
here. Instead, a negative adjustment should be
reported in Part III on line 1b.
Unless otherwise indicated, when reporting deferred
tax on line 4b, don’t include interest on the tax amount.
Instead, report such interest as “Other amounts due” on
Part III, line 3e. For example, interest on tax deferred
under section 1291(c)(1), determined under section
1291(c)(3), is reported on Part III, line 3e.
How to report. Attach a statement to Part II, line 4b,
showing (a) a brief description of the type of tax, and (b)
the amount. For example, if the organization is reporting
$100 of tax due from an increase in tax attributable to a
partner’s audit liability (Form 8978), the attachment would
show “Form 8978” and “$100.”
Alternative Minimum Tax
Line 5. Organizations liable for tax on unrelated business
taxable income may be liable for alternative minimum tax.
Trusts attach Schedule I (Form 1041), Alternative
Minimum Tax—Estate and Trusts, and enter any tax from
Schedule I on this line.
13
Corporations may need to complete Form 4626,
Alterative Minimum Tax—Corporations, and enter any tax
from Form 4626 on this line. You may need to file Form
4626 with your tax year 2025 Form 990-T. See the
Instructions for Form 4626 for more information.
Tax on Noncompliant Facility Income
Line 6. There is a tax on a hospital organization’s
noncompliant facility income. See Regulations section
1.501(r)-2 for more information. This tax is an income tax
and is separate from the excise tax on a failure to meet the
community health needs assessment requirements of
section 501(r)(3) that is reported on Form 4720.
Total
Line 7. Add Part II, lines 3, 4, 5, and 6, to Part II, line 1 or
2, whichever applies.
Part III. Tax and Payments
Foreign Tax Credit
Corporations. See Form 1118, Foreign Tax
Credit—Corporations, for an explanation of when a
corporation can claim this credit for payment of income tax
to a foreign country or U.S. possession.
Trusts. See Form 1116, Foreign Tax Credit (Individual,
Estate, or Trust), for rules on how the trust computes the
foreign tax credit.
Line 1a. Complete the form that applies to the
organization and attach the form to Form 990-T. Enter the
credit on this line.
Other Credits
Line 1b. Use line 1b to enter nonrefundable credits not
identified elsewhere in Part III, line 1. Attach a statement
that lists the applicable form and the amount of the credit.
Such credits may include the following.
• Any QEV passive activity credits from prior years
allowed for the current tax year from Form 8834,
Qualified Electric Vehicle Credit, line 7. Attach Form
8834.
• The allowable credits from Form 8912, Credit to
Holders of Tax Credit Bonds, line 12.
• If your organization received Form 8986 from one or
more partnerships that have elected to push out
adjustments to partnership-related items to their
partners, complete and attach Form 8978. See the
Instructions for Form 8978. Enter the amount of any
decrease in taxes due from Form 8978, line 14.
General Business Credit
Line 1c. Enter the organization’s total general business
credit (excluding the work opportunity credit, the
employee retention credit, the empowerment zone
employment credit, and the credit for employer differential
wage payments).
The organization is required to file Form 3800, General
Business Credit, to claim any business credit. For a list of
credits, see Form 3800. Include the allowable credit from
Form 3800, Part II, line 38, on Form 990-T, Part III, line 1c.
14
Caution: An organization described in section 501(c)
which is exempt from tax under section 501(a) should not
use Form 3800 to claim the refundable small employer tax
credit for certain health insurance premiums paid on
behalf of its employees. See the instructions for Part III,
Line 6f, later. Also, see the Instructions to Form 3800.
Credit for Prior-Year Minimum Tax
Line 1d. Use Form 8801 to figure the minimum tax credit
and any carryforwards of that credit for trusts. For
corporations, use Form 8827.
Total Credits
Line 1e. Add lines 1a through 1d.
Amounts Due
Line 3a. Enter the amount from Form 4255, Part I, line 3,
column (r).
Line 3b. If the corporation disposed of property (or there
was a reduction in the qualified basis of the property) for
which it took the low-income housing credit, and the
corporation did not follow the procedures that would have
prevented recapture of the credit, it may owe a tax. See
Form 8611, Recapture of Low-Income Housing Credit.
Line 3c. If the corporation used the
percentage-of-completion method under section 460(b)
for certain long-term contracts, figure any interest due or
to be refunded using the look-back method, described in
section 460(b)(2). Use Form 8697 to figure any interest
due or to be refunded. See the Instructions for Form 8697.
Include any interest due on line 3c.
Line 3d. If the corporation used the income forecast
method to depreciate property, it must figure any interest
due or to be refunded using the look-back method,
described in section 167(g)(2). Use Form 8866 to figure
any interest due or to be refunded. See the Instructions for
Form 8866. Include any interest due on line 3d.
Line 3e. Other amounts due may be included in the total
entered on Part III, line 3e. See How to report below for
details on reporting these amounts on an attached
statement.
• Interest on deferred tax attributable to installment
sales of certain time-shares and residential lots
(section 453(l)(3)) and certain nondealer installment
obligations (section 453A(c)).
• Interest due on deferred gain (section 1260(b)).
• If the organization makes the election to be taxed on
its income from qualifying shipping activities, complete
Form 8902, Alternative Tax on Qualifying Shipping
Activities, and attach it to Form 990-T. See Income
from qualifying shipping activities, later.
How to report. If the organization entered amounts on
line 3e, attach a statement showing the computation of
each item included in the total for Part III, line 3e. In
addition, specify the following.
• The applicable Code section or form number.
• The type of tax or interest.
• The amount of tax or interest.
For example, if the organization is reporting $100 of tax
due from the recapture of the QEV credit, enter “Section
Instructions for Form 990-T (2025)
30—QEV recapture tax—$100” on the attached
statement.
total amount entered here. Attach a statement showing
the amount of the section 643(g) credit amount.
Total Tax
Foreign Organizations
Line 4. Include any deferred tax on the termination of a
section 1294 election applicable to shareholders in a
qualified electing fund (QEF) in the amount entered on
Part III, line 4. See Form 8621, Part VI, and How to report,
later.
Subtract from the total entered on Part III, line 4, any
deferred tax on the corporation’s share of undistributed
earnings of a QEF. See Form 8621, Part III.
How to report. Attach a statement showing the
computation of each item included in, or subtracted from,
the total on Part III, line 4. In addition, specify the
following.
• The applicable Code section.
• The type of tax.
• The amount of tax.
Line 6d. Enter the tax withheld on UBTI from U.S.
sources that isn’t effectively connected with the conduct of
a trade or business within the United States. Attach Form
1042-S, Foreign Person’s U.S. Source Income Subject to
Withholding, or another form which verifies the withheld
tax reported on Part III, line 6d.
Section 965 and 1062
Line 5a, Section 965
Corporation. For tax years 2021 and later, a corporation
will not have any section 965(a) inclusions to report. If the
organization elected to pay its section 965 net tax liability
in installments, the organization should attach Form 965-B
to Form 990-T. However, the current-year installment
should be paid with a separate voucher, which will be
mailed to the organization in advance of the payment due
date. Don’t include the current-year installment in the Tax
and Payments computation in Part III.
Trust. A trust that has “net 965 tax liability” for the current
tax year (as described in the Instructions for Form 965-A)
should enter on line 5a the amount from the current-year
line on Form 965-A, Part II, column (k). If the trust has no
net 965 tax liability for the current tax year, but has elected
to pay its section 965 net tax liability in installments, the
trust should attach Form 965-A to Form 990-T, but should
not include the current-year installment in the Tax and
Payments computation in Part III (as described above for
corporations).
Line 5b—First Installment of Section 1062
Applicable Net Tax Liability
Complete and attach Form 1062, Schedule(s) A (Form
1062), and a copy of the covenant(s) if electing to defer
the payment of the net income tax attributable to the gain
on the sale or exchange of qualified farmland property
during this tax year under section 1062. Enter the amount
from Form 1062, Part III, line 15. See section 1062 and the
Instructions for Form 1062 for more information.
Backup Withholding
Line 6e. Recipients of dividend or interest payments
must generally certify their correct tax identification
number to the bank or other payer on Form W-9. If the
payer doesn’t get this information, it must withhold part of
the payments as “backup withholding.” If your organization
was subject to erroneous backup withholding because the
payer didn’t realize you were an exempt organization and
not subject to this withholding, you can claim credit for the
amount withheld by including it on Part III, line 6e. See
Backup withholding, earlier.
Credit for Small Employer Health Insurance
Premiums
Line 6f. An organization described in section 501(c)
which is exempt from tax under section 501(a) may be
eligible to claim the refundable small employer tax credit
for a percentage of certain health insurance premiums
paid on behalf of its employees.
A tax-exempt eligible small employer can request the
refundable credit by attaching Form 8941, Credit for Small
Employer Health Insurance Premiums, showing the
calculation for the amount of the refundable credit
claimed. A tax-exempt organization is eligible for the
refundable credit if it is an organization that is described in
section 501(c) which is exempt from tax under section
501(a). The organization must keep records to
substantiate the amount of the credit claimed.
Tip: If a tax-exempt eligible small employer is filing Form
990-T only to request a credit for small employer health
insurance premiums paid, complete the following steps.
1. Fill in the heading (the area above Part I) except items
J and K. Check the box for “Credit from Form 8941” in
item H.
2. Enter -0- on Part I, line 11, and Part III, line 4.
3. Enter the credit from Form 8941, line 20, on Part III,
line 6f.
4. Complete Part III, lines 7, 10, and 11, and the
signature area.
Tax Payments
Elective Payment Election
Line 6b. Enter the total estimated tax payments made for
the tax year.
If an organization is the beneficiary of a trust, and the
trust makes a section 643(g) election to credit its
estimated tax payments to its beneficiaries, include the
organization’s share of the estimated tax payments in the
Line 6g. Enter on line 6g the total net elective payment
election amount from Form 3800, Part III, line 6, column
(j).
Instructions for Form 990-T (2025)
15
Tax on Undistributed Long-Term Capital Gain by
RIC or REIT
Line 6h. Enter the amount of tax paid by a regulated
investment company (RIC) or real estate investment trust
(REIT) on undistributed long-term capital gains. Attach
each Form 2439 you received from each RIC or REIT of
which you are a shareholder. If you are filing a composite
Form 990-T, see Composite Form 990-T, earlier.
Credit for Federal Excise Tax Paid on Fuels
Line 6i. If you paid a federal excise tax on certain fuels
and qualify for any of the credits listed below, attach Form
4136 to your return and enter the total credit on line 6i.
• A credit for certain nontaxable uses (or sales) of fuel
during your income tax year.
• A credit for blending a diesel-water fuels emulsion.
• A credit for exporting dyed fuels or gasoline
blendstocks.
See the Instructions for Form 4136 for more information
about these credits.
Note: Form 8849, Claim for Refund of Excise Taxes, may
be used to claim a periodic refund of excise taxes instead
of waiting to claim a credit on Form 4136. See the
Instructions for Form 8849 and Pub. 510, Excise Taxes.
Other Credits
Line 6j. For other credits provide the following
information.
• The number of the form used to calculate the credit, or
the Code section that establishes the credit.
• A brief description of the credit.
• The amount of the credit.
If necessary, provide information required to claim a
specific credit in Part V, Supplemental Information.
Other credits may include the following.
• The credit for ozone-deleting chemicals. Include any
credit the organization is claiming under section
4682(g) for taxes paid on chemicals used as
propellants in metered-dose inhalers.
• The amount of current year net section 965 tax liability,
for a trust, this amount will be from Form 956-A, Part I,
column (d), line 4.
Note: Do not use Part III, line 6j, to claim a refund of
federal tax withheld and shown on a Form 1099. Claims
for refund of backup withholding should be shown on Part
III, line 6e.
Section 1062 Applicable Net Tax Liability
Line 6k. If the organization is electing to defer the
payment of the net income tax attributable to the gain on
the sale or exchange of qualified farmland property,
complete and attach Form 1062 and Schedule(s) A (Form
1062). Enter the amount from Form 1062, Part III, line 14.
See section 1062 and the Instructions for Form 1062 for
more information.
16
Estimated Tax Penalty
Line 8. Use Form 2220, Underpayment of Estimated Tax
by Corporations, to see if the organization owes a penalty
and its amount. Generally, the organization isn’t required
to file this form because the IRS can figure the amount of
any penalty and notify the organization. However, even if
the organization doesn’t owe the penalty, you must
complete and attach Form 2220 if either of the following
applies.
• The annualized income or adjusted seasonal
installment method is used.
• The organization is a “large organization” computing
its first required installment based on the prior year’s
tax.
If you attach Form 2220, check the box on Form 990-T,
Part III, line 8, and enter the amount of any penalty on this
line.
Tax Due
Line 9. You must pay the tax in full when the return is
filed. You may pay by EFTPS. For more information about
EFTPS, see Electronic deposit requirement, earlier. Also,
you may pay by credit or debit card.
To pay by credit or debit card. For information on
paying your taxes electronically, including by credit or
debit card, go to IRS.gov/E-pay.
Direct Deposit
Line 11. If the organization has access to U.S. banking
services, you should use direct deposit for any refunds,
whenever possible. See IRS.gov/DirectDeposit for more
information.
Direct deposit is available for this form. If there is an
overpayment when filing the return, complete and attach
Form 8050. For more information see the Instructions for
Form 8050.
Part IV. Statements Regarding Certain
Activities and Other Information
Complete all lines in Part IV.
Line 1. Check “Yes” if either item (1) or (2) below applies.
1. At any time during the year the organization had an
interest in or signature or other authority over a
financial account in a foreign country (such as a bank
account, securities account, or other financial
account); and
a. The combined value of the accounts was more
than $10,000 at any time during the year; and
b. The accounts were not with a U.S. military banking
facility operated by a U.S. financial institution.
2. The organization owns more than 50% of the stock in
any corporation that would answer “Yes” to item (1).
If the “Yes” box is checked, write the name of the
foreign country or countries. If the list of foreign country
names will not fit in the available space, continue the list in
Part V, Supplemental Information.
Instructions for Form 990-T (2025)
Get FinCEN Form 114, Report of Foreign Bank and
Financial Accounts (FBAR), to see if the organization is
considered to have an interest in or signature or other
authority over a financial account in a foreign country
(such as a bank account, securities account, or other
financial account). If the organization is required to file this
form, file FinCEN Form 114 electronically with the
Department of the Treasury using FinCEN’s BSA E-Filing
System. Because FinCEN Form 114 isn’t a tax form, don’t
file it with Form 990-T.
See FinCEN for more information.
Line 2. The organization may be required to file Form
3520, Annual Return To Report Transactions With Foreign
Trusts and Receipt of Certain Foreign Gifts, if either of the
following applies.
• It directly or indirectly transferred money or property to
a foreign trust. For this purpose, any U.S. person who
created a foreign trust is considered a transferor.
• It is treated as the owner of any part of the assets of a
foreign trust under the grantor trust rules.
See the Instructions for Form 3520.
Caution: An owner of a foreign trust must ensure that the
trust files an annual information return on Form 3520-A,
Annual Information Return of Foreign Trust With a U.S.
Owner. For details, see the Instructions for Form 3520-A.
Line 3. Report any tax-exempt interest received or
accrued in the space provided. Include any
exempt-interest dividends received as a shareholder in a
mutual fund or other RIC.
Line 4. Use line 4 to show the amount of the NOL
carryover to the tax year from tax years prior to 2018
(“pre-2018 NOL”), even if some of the loss is used to offset
income on this return. The amount to enter is the total of
all pre-2018 NOLs generated in any year prior to 2018,
and not used to offset income (either as a carryback or
carryover) to a tax year prior to 2025. Do not reduce the
amount by any NOL deduction reported on Part I, line 6.
Line 5. Use the table on line 5 to show the amount of
each NOL carryover from tax years after 2017 that is
attributable to each separate trade or business conducted
at any time after 2017 (“siloed post-2017 NOL”) to the tax
year. Include the NOL for each separate trade or business
conducted after 2017, even if a Schedule A (Form 990-T)
for any one or more specific trades or businesses isn’t
included with this return for this tax year. Report the full
amount of the available NOL for each separate trade or
business, even if some of the loss is used.
In the first column under line 5, enter the business
activity code to which each NOL relates. In the second
column, enter the total amount of each siloed post-2017
NOL generated in any prior year after 2017 and not used
to offset income (either as a carryback or carryover) to a
tax year prior to 2025 to offset income reported on a
Schedule A (Form 990-T) filed for that separate trade or
business on this return. Don’t reduce the amount by any
NOL deduction reported on Schedule A (Form 990-T),
Part II, line 17. See Separate Trades or Businesses, later,
for information about changing the business activity code
associated with a particular trade or business, and the
effect of such a change on NOLs.
Instructions for Form 990-T (2025)
Part V. Supplemental Information
Use Part V to provide the IRS with narrative information
required for responses to specific questions on Form
990-T, and to explain the organization’s operations or
responses to various questions.
Signature
Corporations. The return must be signed and dated by
the president, vice president, treasurer, assistant
treasurer, or chief accounting officer, or by any other
corporate officer (such as a tax officer) authorized to sign.
Receivers, trustees, or assignees must also sign and date
any return filed on behalf of the organization.
Trusts. The return must be signed and dated by the
individual fiduciary, or by the authorized officer of the trust
receiving or having custody or control and management of
the income of the trust. If two or more individuals act jointly
as fiduciaries, any one of them may sign.
Special rule for IRA trusts. A trustee of IRA trusts
may use a facsimile signature if all of the following
conditions are met.
• Each group of returns sent to the IRS must be
accompanied by a letter signed by the person
authorized to sign the returns declaring, under
penalties of perjury, that the facsimile signature
appearing on the returns is the signature adopted by
that person to sign the returns filed and that the
signature was affixed to the returns by that person or
at that person’s direction.
• The letter must also list each return by the name and
EIN of the IRA trust.
• After the facsimile signature is affixed, no entries on
the return may be altered other than to correct
discernible arithmetic errors.
• A manually signed copy (of the letter submitted to the
IRS with the returns and a record of any arithmetic
errors corrected) must be retained on behalf of the
IRA trusts listed in the letter and it must be available
for inspection by the IRS.
Paid Preparer
Anyone who is paid to prepare the return must sign the
return, list the preparer tax identification number (PTIN),
and fill in the other blanks in the Paid Preparer Use Only
area unless that person is paid for preparation as part of
their duties as your employee.
The paid preparer must:
• Sign the return in the space provided for the preparer’s
signature;
• Include their PTIN; and
• Give a copy of the return to the organization.
Note: A paid preparer may sign original returns, amended
returns, or requests for filing extensions by rubber stamp,
mechanical device, or computer software program. Also,
facsimile signatures are authorized.
Paid preparer authorization. If the organization wants
to allow the IRS to discuss this tax return with the paid
preparer who signed it, check the “Yes” box in the
signature area of the return. This authorization applies
only to the individual whose signature appears in the Paid
17
Preparer Use Only section of its return. It doesn’t apply to
the firm, if any, shown in that section.
If the “Yes” box is checked, the organization is
authorizing the IRS to call the paid preparer to:
• Give the IRS any information that is missing from its
return;
• Call the IRS for information about the processing of its
return or the status of its refund or payment(s); and
• Respond to certain IRS notices that the organization
has shared with the preparer about a math error,
offsets, and return preparation. The notices won’t be
sent to the preparer.
The organization isn’t authorizing the paid preparer to
receive any refund check, bind the organization to
anything (including any additional tax liability), or
otherwise represent the organization before the IRS. If the
organization wants to expand the paid preparer’s
authorization, see Pub. 947, Practice Before the IRS and
Power of Attorney.
The authorization can’t be revoked. However, the
authorization will automatically end no later than the due
date (excluding extensions) for filing next year’s Form
990-T.
Caution: Enter the paid preparer’s PTIN, not their SSN, in
the “PTIN” box in the paid preparer’s block. Because Form
990-T is publicly disclosable when filed by a 501(c)(3)
organization, any information entered in this block will be
publicly disclosed. For more information about PTINs, go
to IRS.gov/Taxpros.
General Instructions—Schedule A
(Form 990-T)
Purpose of the Schedule
Complete a separate Schedule A (Form 990-T) to report
income and allowable deductions for each separate
unrelated trade or business.
Separate Trades or Businesses
An exempt organization may engage in more than one
unrelated trade or business. Prior to the enactment of
section 512(a)(6), an exempt organization deriving gross
income from the regular conduct of two or more unrelated
trades or businesses calculated UBTI by determining its
aggregate gross income from all such unrelated trades or
businesses and reducing that amount by the aggregate
deductions allowed with respect to all such unrelated
trades or businesses. However, section 512(a)(6)
changed this calculation for exempt organizations with
more than one unrelated trade or businesses so that, in
the case of any exempt organization with more than one
unrelated trade or business:
• UBTI, including for purposes of determining any NOL
deduction, shall be computed separately with respect
to each trade or business and without regard to
section 512(b)(12) (allowing a specific deduction of
$1,000);
• The UBTI of such exempt organization shall be the
sum of the UBTI so computed with respect to each
18
trade or business, less a specific deduction under
section 512(b)(12); and
• For purposes of section 512(a)(6)(B), UBTI with
respect to any such trade or business shall not be less
than zero.
Thus, under section 512(a)(6), an exempt organization
may not aggregate income and deductions from all
unrelated trades or businesses when calculating UBTI.
An organization determines whether it regularly carries
on one or more unrelated trades or businesses by
applying sections 511 through 514. Identify each separate
trade or business using the first two digits of the NAICS
two-digit code that most accurately describes the
unrelated trade or business based on the more specific
NAICS code, such as at the six-digit level. Identify
activities in the nature of investments, which aren’t
described in NAICS, using the appropriate business
activity code described under Non-NAICS Business
Activity Codes, later.
An organization will use each NAICS two-digit code
only once. For example, a hospital organization that
operates several hospital facilities that include pharmacies
that sell goods to the general public would include all the
pharmacies under the NAICS two-digit code for retail
trade, regardless of whether the hospital organization
keeps separate books and records for each pharmacy.
Once a two-digit NAICS code or business activity code
is used for an unrelated trade or business, you should
continue to use that same code in subsequent tax years. If
it is necessary to change the two-digit NAICS code or
business activity code previously used for an unrelated
trade or business, you must report the change in a
statement attached to the Schedule A (Form 990-T) on
which the activities are reported. The statement should
include the following.
• The two-digit NAICS code or business activity code
used in the previous tax year.
• The two-digit NAICS code or business activity code
used this year.
• If filing more than one Schedule A (Form 990-T), the
sequence numbers from item D of the applicable
Schedule A (Form 990-T).
• A narrative explanation describing the reason for the
change.
Caution: See Regulations section 1.512(a)-6(h)(4)
regarding the potential effects on NOL carryforwards upon
a change of the two-digit NAICS code for an unrelated
trade or business.
Caution: Regulations section 1.512(a)-6(c)(9) describes
a transition rule for certain partnership interests. The
transition period ended on the first day of the first tax year
beginning after December 2, 2020.
Dual-Use Property
Section 512(a)(1) permits an exempt organization with an
unrelated trade or business to reduce the income from
that trade or business by the deductions allowed by
Instructions for Form 990-T (2025)
Chapter 1 that are directly connected with the carrying on
of such trade or business. To be “directly connected” with
a trade or business, an item of deduction must have a
proximate and primary relationship to the carrying on of
the unrelated trade or business generating the gross
income. See Regulations section 1.512(a)-1(a).
Expenses, depreciation, and similar items attributable
solely to the conduct of an unrelated trade or business are
proximately and primarily related to that trade or business
and qualify to reduce income from such trade or business
under section 512(a)(1) to the extent such items meet the
requirements of section 162 (trade or business expenses),
section 167 (depreciation), and other relevant provisions.
To the extent that an exempt organization may have items
of deduction that are shared between an exempt activity
and an unrelated trade or business, Regulations section
1.512(a)-1(c) provides special rules for allocating such
expenses.
For example, if facilities are used both to carry on
exempt activities and to conduct unrelated trade or
business activities, then expenses, depreciation, and
similar items attributable to such facilities must be
allocated between the two uses on a reasonable basis.
See Regulations section 1.512(a)-1(c). The allocation
issues under section 512(a)(1) are also relevant under
section 512(a)(6) because an exempt organization with
more than one unrelated trade or business must not only
allocate indirect expenses among exempt and taxable
activities, as described in Regulations section
1.512(a)-1(c) but also among separate unrelated trades or
businesses.
The allocation of expenses, depreciation, and similar
items using an unadjusted gross-to-gross method is not
reasonable if the cost of providing the good or service is
substantially the same but the price charged differs
between related and unrelated activities.
Which Parts To Complete
Complete a separate Schedule A (Form 990-T), Parts I
and II, for each unrelated trade or business. Complete
only the lines relevant to the unrelated trade or business
being reported on that Schedule A (Form 990-T).
Is gross income more than $10,000? If the sum of the
amounts in all Schedules A (Form 990-T), Part I, line 13,
column (A), is more than $10,000, you must complete all
parts of each Schedule A (Form 990-T) that apply to the
unrelated trade or business reported on that Schedule A
(Form 990-T).
Is gross income $10,000 or less? If the sum of the
amounts in all Schedules A (Form 990-T), Part I, line 13,
column (A), is $10,000 or less, complete Schedule A
(Form 990-T) and Form 990-T as follows.
1. Schedule A (Form 990-T).
a. Complete the heading on each Schedule A (Form
990-T).
b. Part I. Complete only the lines that apply.
Instructions for Form 990-T (2025)
i. Enter information directly into column (A) on
lines 1, 3–5, 12, and 13.
ii. Entries for lines 2 and 6–11, must be made on
the part referenced in the text for the line in
Part I. For example, enter the amount for Part I,
line 2, on Part III, line 8. For Part I, line 6,
columns (A) and (B), enter the amounts on
Part IV, line 3 and line 5, respectively.
iii. Make entries as necessary to complete the
applicable lines in column (C).
c. Part II. Complete lines 15–18, and if necessary,
the attachment to line 17 (NOL deduction).
2. Form 990-T.
a. Complete all applicable lines in the heading area.
b. Complete all applicable lines as needed to
determine the appropriate tax, applicable credits,
and balance due or refund amounts.
c. Complete the signature area.
Caution: If an entry for a line on Part I or Part II must be
made on a different part of Schedule A (Form 990-T),
complete only the lines in the part that reference a specific
line on Part I or Part II. Leave all other lines in the
applicable Part blank.
Filers with gross income of $10,000 or less, as
described above, don’t have to complete Schedule A
(Form 990-T), Parts III through X (except as described
above because certain entries must be made in those
sections to populate lines in Parts I and II). However, refer
to the applicable parts of Schedule A (Form 990-T) when
completing Schedule A (Form 990-T), Part I, column (A),
and in determining the deductible expenses to include on
Schedule A (Form 990-T), Part I, line 13, column (B).
Exceptions and Special Rules
Member income of mutual or cooperative electric
companies. Income of a mutual or cooperative electric
company described in section 501(c)(12), which is treated
as member income under subparagraph (H), is excluded
from UBTI.
Income from qualifying shipping activities. The
organization’s gross income doesn’t include income from
qualifying shipping activities (as defined in section 1356) if
the organization makes an election under section 1354 on
a timely filed return (including extensions) to be taxed on
its notional shipping income (as defined in section 1353)
at the highest corporate rate. If the election is made, the
organization generally may not claim any loss, deduction,
or credit with respect to qualifying shipping activities. An
organization making this election may also elect to defer
gain on the disposition of a qualifying vessel under section
1359. Use Form 8902 to figure the tax. Include the
alternative tax on Form 990-T, Part III, line 3e.
Passive loss and at-risk limitations. Under section
469, certain taxpayers, including certain tax-exempt
organizations, may not deduct a passive activity loss
(PAL). Such tax-exempt organizations (“affected
tax-exempt organizations”) include a trust (such as a trust
19
described in section 501(c), a trust described in section
401(a), or an IRA), and a corporation if at any time during
the last half of its tax year more than 50% in value of the
outstanding stock of the corporation is owned, directly or
indirectly, by or for not more than five organizations that
are private foundations under section 509(a) or are
described in section 401(a) or 501(c)(17) (for example, a
stock corporation described in section 501(c)(2) with a
401(a) parent or private foundation parent).
A PAL occurs when total losses (including prior-year
unallowed losses) from all the organization’s passive
activities exceed the total income from all its passive
activities. Generally, passive activities include (1) trade or
business activities in which the organization didn’t
materially participate for the tax year; and (2) rental
activities, regardless of your participation. If the
organization has income or loss from a passive activity,
several lines on Form 990-T and Schedule A (Form 990-T)
may be affected by these rules.
PALs can’t be used to offset income from nonpassive
activities. Passive activity income doesn’t include portfolio
income. Portfolio income (see Temporary Regulations
section 1.469-2T(c)(3)) is income from a nonpassive
activity. Portfolio income includes all gross income, other
than income derived in the ordinary course of a trade or
business, that is attributable to interest, dividends,
annuities, and royalties (by contrast, a bank’s receipt of
interest is in the ordinary course of a trade or business, as
is a securities dealer’s receipt of dividends). Portfolio
income also includes gain or loss from the disposition of
property that produces portfolio income or is held for
investment (see section 163(d)(5)). The rule treating
portfolio income as not from a passive activity doesn’t
apply to the extent that income, of a type generally
regarded as portfolio income, is derived in the ordinary
course of a trade or business. For example, the business
income of a bank typically is largely interest. Similarly, a
securities broker/dealer may earn a substantial portion of
the income from the business in the form of dividends and
gains on sales of dividend-bearing instruments. Interest
income may also arise in the ordinary course of a trade or
business with respect to installment sales and interest
charges on accounts receivable. This means that portfolio
income may not be reduced by PALs or passive activity
credits. For example, any portfolio income earned by a
trust described in section 501(a) that is UBTI (such as
unrelated debt-financed income) may not be offset by
PALs from an unrelated trade or business.
Section 469(k) provides that the passive activity
limitations must be applied separately to items from each
publicly traded partnership (PTP). A PTP is a partnership
whose interests are traded on an established securities
market or are readily tradable on a secondary market (or
its substantial equivalent). PALs from a PTP may generally
be used only to offset income or gain from passive
activities of the same PTP. This means that a partner in a
PTP may not use PALs and passive activity credits from a
PTP to offset income from other sources, including
passive activity income from another PTP. Such PALs and
passive activity credits aren’t allowed for the tax year.
Generally, PALs are subject to other limitations (for
example, basis and at-risk limitations) before they are
20
subject to the PAL limitations. For example, the at-risk
rules under section 465 generally prohibit trusts and
corporations that are affected tax-exempt organizations
from claiming losses from activities in excess of the
taxpayer’s amount at risk in the activity.
An affected tax-exempt organization may need to
attach Form 6198 and either Form 8582 or Form 8810. For
more information on these rules, see Pub. 925, Passive
Activity and At-Risk Rules.
Caution: How to report income received from a
payment card and third-party network transaction.
An organization that receives a Form 1099-K reporting a
“gross amount” received from payment card and
third-party network transactions in the tax year should
report these amounts in the same manner as if the
payments weren’t reported on a Form 1099-K. There isn’t
any one specific line on which to report an amount from
Form 1099-K; the correct line should be determined
based on the nature of the payments. Some payments
received may constitute unrelated business income; see
the instructions below to determine the appropriate line.
For instance, if some of the payments are sales income
from an unrelated business, then those payments would
be reported on Schedule A (Form 990-T), Part I, line 1a.
Retain Form 1099-K with your other records.
Specific Instructions—Schedule A
(Form 990-T)
Items A Through E
Item A. Enter the same name as entered in the heading
area of Form 990-T.
Item B. Enter the same EIN as entered in item D of Form
990-T.
Item C. On each Schedule A (Form 990-T), enter the
business activity code that best describes the
organization’s unrelated trade or business reported on
that Schedule A (Form 990-T). Modernized e-File requires
a 6-digit numerical entry for item C. Unless you are using a
6-digit non-NAICS business activity code, you should
enter the 2 digits of the NAICS code in the first two
positions and then enter 4 zeros to complete the entry. For
example, if the 2-digit business activity code 45 (for retail
trade) best describes your unrelated trade or business,
enter “450000” in item C. See Business Activity Codes,
later, for more information about business activity codes.
Part I. Unrelated Trade or Business
Income
Gross Receipts or Sales
Line 1a. Enter the gross receipts from an unrelated trade
or business regularly conducted that involves the sale of
goods or performance of services.
Tip: A section 501(c)(7) social club would report its
restaurant and bar receipts from nonmembers on
Schedule A (Form 990-T), Part I, line 1a, but would report
its investment income on Schedule A (Form 990-T), Part I,
line 9, and on Schedule A (Form 990-T), Part VII.
Instructions for Form 990-T (2025)
Advance payments. In general, advance payments are
reported in the year of receipt. To report income from
long-term contracts, see section 460. For rules that allow
a limited deferral of advance payments beyond the current
tax year, see section 451(c). Also, see Regulations
sections 1.451-8(c), (d), and (e). For applicability dates,
see Regulations section 1.451-8(h). For information on
adopting or changing to a permissible method for
reporting advance payments for services and certain
goods by an accrual method corporation, see the
Instructions for Form 3115. Also, see Rev. Proc. 2021-34.
Installment sales. Generally, the installment method
cannot be used for dealer dispositions of property. A
dealer disposition is:
• Any disposition of personal property by a person who
regularly sells or otherwise disposes of personal
property of the same type on the installment plan, or
• Any disposition of real property held for sale to
customers in the ordinary course of the taxpayer’s
trade or business.
These restrictions on using the installment method
don’t apply to dispositions of property used or produced in
a farming business or sales of time-shares and residential
lots for which the organization elects to pay interest under
section 453(l)(3).
For sales of time-shares and residential lots reported
under the installment method, the organization’s income
tax is increased by the interest payable under section
453(l)(3).
Enter on Schedule A (Form 990-T), Part I, line 1a and
line 3, the gross profit on collections from installment sales
for any of the following.
• Dealer dispositions of property before March 1, 1986.
• Dispositions of property used or produced in the trade
or business of farming.
• Certain dispositions of time-shares and residential lots
reported under the installment method.
Attach Form 6252 to show information about each
installment sale.
Nonaccrual experience method. Accrual method
organizations aren’t required to accrue certain amounts to
be received from the performance of services that, on the
basis of their experience, won’t be collected, if:
• The services are in the field of health, law,
engineering, architecture, accounting, actuarial
science, performing arts, or consulting; or
• The organization’s average annual gross receipts for
the 3 prior tax years doesn’t exceed $31 million.
This provision doesn’t apply to any amount if interest is
required to be paid on the amount or if there is any penalty
for failure to timely pay the amount. See Regulations
section 1.448-3. Organizations that qualify to use the
nonaccrual experience method should attach a statement
showing total gross receipts, amounts not accrued as a
result of the application of section 448(d)(5), and the net
amount accrued. Enter the net amount on Schedule A
(Form 990-T), Part I, line 1a.
Gain or loss on disposition of certain brownfield
property. Gain or loss from the qualifying sale, exchange,
or other disposition of a qualifying brownfield property (as
Instructions for Form 990-T (2025)
defined in section 512(b)(19)(C)), which was acquired by
the organization after 2004, is excluded from unrelated
business taxable income and is excepted from the
debt-financed rules for such property. See sections 512(b)
(19) and 514(b)(1)(E).
Capital Gain Net Income
Line 4a. Generally, organizations required to file Form
990-T (except organizations described in sections 501(c)
(7), (9), and (17)) aren’t taxed on the net gains from the
sale, exchange, or other disposition of property. However,
net capital gains on debt-financed property, capital gains
on cutting timber, and ordinary gains on sections 1245,
1250, 1252, 1254, and 1255 property are taxed. See Form
4797, Sales of Business Property, and its instructions for
additional information.
Also, any capital gain or loss passed through from an S
corporation or any gain or loss on the disposition of S
corporation stock by a qualified tax-exempt organization
(see S Corporations, later) is taxed as a capital gain or
loss and reported on Schedule A (Form 990-T), Part I,
line 4.
Capital gains and losses should be reported by a trust
on Schedule D (Form 1041), Capital Gains and Losses,
and by a corporation on Schedule D (Form 1120), Capital
Gains and Losses (and Form 8949, Sale and Other
Dispositions of Capital Assets). Schedule D of Form 1041
or Form 1120 (and Form 8949, if applicable) must be
attached to Form 990-T.
If you deferred a capital gain into a QOF, you must
attach Schedule D, Form 8949, and Form 8997 to your
Form 990-T. You will need to annually file Form 8997 until
you dispose of the investment. See the Instructions for
Form 8997.
An organization that transfers securities it owns for the
contractual obligation of the borrower to return identical
securities recognizes no gain or loss on that exchange or
on the subsequent receipt of identical securities in
satisfaction of the contractual obligation. To qualify for this
treatment, the organization must lend the securities under
an agreement that requires:
1. The return of identical securities;
2. The payment of amounts equivalent to the interest,
dividends, and other distributions that the owner of
the securities would normally receive; and
3. The risk of loss or opportunity for gain not to be
lessened.
See sections 512(a)(5) and 1058(b) for details.
Debt-financed property disposition. The amount of
gain or loss to be reported on the sale, exchange, or other
disposition of debt-financed property is the same
percentage as the highest acquisition indebtedness for
the property for the 12-month period before the date of
disposition is to the average adjusted basis of the
property. The percentage may not be more than 100%.
See the instructions for Schedule A (Form 990-T), Part V,
Line 5, later, to determine adjusted basis and average
adjusted basis.
21
If debt-financed property is depreciable or depletable
property, the provisions of sections 1245, 1250, 1252,
1254, and 1255 must be considered first.
Example. On January 1, 2024, an exempt educational
corporation, using $288,000 of borrowed funds,
purchased an office building for $608,000. The only
adjustment to basis was $29,902 for depreciation (straight
line method under MACRS over the 39-year recovery
period for nonresidential real property). The corporation
(section 501(c)(3) organization) sold the building on
December 31, 2025, for $640,000. At the date of sale, the
adjusted basis of the building was $578,098 ($608,000 −
$29,902) and the indebtedness remained at $288,000.
The adjusted basis of the property on the first day of the
year of disposition was $593,037. The average adjusted
basis is $585,568 (($593,037 + $578,098) ÷ 2). The debt/
basis percentage is 49% ($288,000 ÷ $585,568).
The taxable gain is $30,332 (49% × ($640,000 −
$578,098)). This is a long-term capital gain. A corporation
should enter the gain on Schedule D (Form 1120), Part II,
line 8. A trust should enter the gain on Schedule D (Form
1041), Part II, line 8, if applicable. In either scenario (a
corporation or a trust), the educational organization must
attach a statement to Form 990-T, in addition to the
Schedule D, showing how the gain was figured along the
lines described in this example, if the details weren’t
provided with the Schedule D.
Disposition of property received from taxable subsidiary and used in unrelated business. A taxable
80%-owned subsidiary corporation of one or more
tax-exempt entities is generally subject to tax on a
distribution in liquidation of its assets to its exempt parent
(or parents). See section 337. The assets are treated as if
sold at FMV.
Tax-exempt entities for this purpose include:
• Organizations described in sections 501(a), 529,
529A, and 115;
• Charitable remainder annuity trusts or unitrusts;
• U.S. (including states) and foreign governments;
• Indian tribal governments and certain corporations;
• International organizations; and
• Similar non-taxable organizations.
A taxable corporation that transfers substantially all of
its assets to a tax-exempt entity in a transaction that
otherwise qualifies for nonrecognition treatment must
recognize gain on the transaction as if it sold the assets at
FMV. However, such a transfer isn’t taxable if it qualifies as
a like-kind exchange under section 1031 or an involuntary
conversion under section 1033. In such a case, the built-in
appreciation is preserved in the replacement property
received in the transaction. A “taxable corporation” is any
corporation that isn’t a tax-exempt entity as defined above,
including an S corporation.
A corporation that changes status from taxable to
tax-exempt is generally treated as if it transferred all of its
assets to a tax-exempt entity immediately before the
change in status (thus subjecting it to the tax on a deemed
sale for FMV). This rule doesn’t apply where the taxable
corporation becomes exempt within 3 years of formation
(within 7 years of formation for section 501(c)(7)
organizations), or had previously been exempt and within
22
several years (generally a period of 3 years) regains
exemption, unless the principal purpose of the
transactions is to avoid the tax on the change in status.
In the transactions described above, the taxable event
is deferred for property that the tax-exempt entity
immediately uses in an unrelated business. If the
tax-exempt parent later disposes of the property, then any
gain (not in excess of the amount not recognized) is
included in the parent’s UBTI. If there is partial use of the
assets in unrelated business, then there is partial
recognition of gain or loss with respect to the assets not
so used. Property is treated as disposed if the tax-exempt
entity no longer uses it in an unrelated business.
Losses on the transfer of assets to a tax-exempt entity
are disallowed if part of a plan having a principal purpose
of recognizing losses.
Net Gain or (Loss)
Line 4b. Show gains and losses on other than capital
assets on Form 4797. Enter on this line the net gain or
(loss) from Form 4797, Part II, line 17.
An exempt organization using Form 4797 to report
ordinary gain on sections 1245, 1250, 1252, 1254, and
1255 property will include only depreciation, amortization,
or depletion allowed or allowable in figuring UBTI or
taxable income of the organization (or a predecessor
organization) for a period when it was not exempt.
Capital Loss Deduction for Trusts
Line 4c. If a trust has a net capital loss, it is subject to the
limitations of Schedule D (Form 1041). Enter on this line
the loss figured on Schedule D (Form 1041).
Income or (Loss) From a Partnership or an S
Corporation
Line 5. See Regulations section 1.512(a)-6 for rules
permitting the aggregation of income (and directly
connected deductions) of certain partnership interests.
Also, for trusts and certain corporations, there are
limitations on income and losses (including from a
partnership or an S corporation) under section 469 (the
PAL and credit limitation rules) and section 465 (at-risk
limitations). For more information on these rules, see the
discussion of the application of the passive activity loss
and at-risk limitations to affected tax-exempt organizations
in the introductory instructions under Part I. Unrelated
Trade or Business Income, earlier.
Partnerships
If the organization is a partner in a partnership conducting
an unrelated trade or business, enter the organization’s
share (whether or not distributed) of the partnership’s
income or loss from the unrelated trade or business. The
organization is required to notify the partnership of its
tax-exempt status. Figure the gross income and
deductions of the partnership in the same way you figure
unrelated trade or business income the organization earns
directly.
Attach a statement to this return showing the
organization’s share of the partnership’s gross income
Instructions for Form 990-T (2025)
from the unrelated trade or business, and its share of the
partnership deductions directly connected with the
unrelated gross income.
S Corporations
Qualified tax-exempt organizations can be shareholders in
an S corporation without the S corporation losing its status
as an S corporation. Qualified tax-exempt organizations
that hold stock in an S corporation treat their stock interest
as an interest in an unrelated trade or business. All items
of income, loss, or deduction that the organization
receives as a shareholder of the S corporation are taken
into account in Schedule A (Form 990-T), Part I, line 5, in
figuring UBTI and not reported on another line of
Schedule A (Form 990-T) that otherwise would apply,
except capital gains and losses, which are reported on
Schedule A (Form 990-T), Part I, line 4. Report on
Schedule A (Form 990-T), Part I, line 4, any gain or loss
on the disposition of S corporation stock.
Qualified tax-exempts. A qualified tax-exempt is an
organization that is described in section 401(a) (qualified
stock bonus, pension, and profit-sharing plans) or 501(c)
(3) and exempt from tax under section 501(a).
Exception. Employee stock ownership plans (ESOPs)
don’t follow these S corporation rules if the S corporation
stock is an employer security, as defined in section 409(l).
Attach a statement to this return showing the qualified
tax-exempt’s share of all items of income, loss, or
deduction. Combine the income, loss, and deductions
(except for the capital gains and losses) on the statement.
If you hold stock in more than one S corporation, total the
combined amounts. Show capital gains and losses
separately and include them on Schedule A (Form 990-T),
Part I, line 4a.
Rent Income
Line 6. Enter the amount computed on Schedule A (Form
990-T), Part IV, line 3, on Schedule A (Form 990-T), Part I,
line 6, column (A).
Enter the amount computed on Schedule A (Form
990-T), Part IV, line 5, on Schedule A (Form 990-T), Part I,
line 6, column (B).
Unrelated Debt-Financed Income
Line 7. Enter the amount computed on Schedule A (Form
990-T), Part V, line 8, on Schedule A (Form 990-T), Part I,
line 7, column (A).
Enter the amount computed on Schedule A (Form
990-T), Part V, line 10, on Schedule A (Form 990-T), Part
I, line 7, column (B).
Interest, Annuities, Royalties, and Rents From a
Controlled Organization
Line 8. Enter the sum of columns 5 and 10 from
Schedule A (Form 990-T), Part VI on Schedule A (Form
990-T), Part I, line 8, column (A).
Enter the sum of columns 6 and 11 from Schedule A
(Form 990-T), Part VI on Schedule A (Form 990-T), Part I,
line 8, column (B).
Instructions for Form 990-T (2025)
Investment Income of Section 501(c)(7), (9), or
(17) Organizations
Line 9. Enter the sum of amounts from Schedule A (Form
990-T), Part VII, column 2, on Schedule A (Form 990-T),
Part I, line 9, column (A).
Enter the sum of amounts in Schedule A (Form 990-T),
Part VII, column 5, on Schedule A (Form 990-T), Part I,
line 9, column (B).
Exploited Exempt Activity Income, Other Than
Advertising Income
Line 10. Enter the amount computed on Schedule A
(Form 990-T), Part VIII, line 2, on Schedule A (Form
990-T), Part I, line 10, column (A).
Enter the amount computed on Schedule A (Form
990-T), Part VIII, line 3, on Schedule A (Form 990-T), Part
I, line 10, column (B).
Advertising Income
Line 11. Enter the amount computed on Schedule A
(Form 990-T), Part IX, line 2a, on Schedule A (Form
990-T), Part I, line 11, column (A).
Enter the amount computed on Schedule A (Form
990-T), Part IX, line 3a, on Schedule A (Form 990-T), Part
I, line 11, column (B).
Other Income
Line 12. Enter on Schedule A (Form 990-T), Part I,
line 12, any item of unrelated business income from a
particular trade or business that isn’t reportable elsewhere
on the return. Attach a statement describing the sources
of the other income and their amounts. Such amounts
may include:
• Recoveries of bad debts deducted in earlier years
under the specific charge-off method;
• The amount from Form 8864, Biodiesel, Renewable
Diesel, or Sustainable Aviation Fuels Credit (if
applicable); and
• Proceeds received from employer-owned life
insurance contracts issued after August 17, 2006
(complete and attach Form 8925).
Organizations described in section 501(c)(19).
Enter the net income from an insurance business that was
not properly set aside. These organizations may set aside
income from payments received for life, sickness,
accident, or health insurance for members of the
organization or their dependents.
1. To provide for the payment of insurance benefits.
2. For a purpose specified in section 170(c)(4) (religious,
charitable, scientific, literary, educational, etc.).
3. For administrative costs directly connected with
benefits described in (1) and (2) above.
Amounts set aside and used for purposes other than
those in (1), (2), or (3) above must be included in UBTI for
the tax year if they were previously excluded from taxable
income.
Any amount spent for a purpose described in section
170(c)(4) is first considered paid from funds earned by the
23
organization from insurance activities if the income isn’t
used for the insurance activities.
Expenditures for lobbying aren’t considered section
170(c)(4) expenses.
Income from property financed with qualified
501(c)(3) bonds. If any part of the property is used in a
trade or business of any person other than a section
501(c)(3) organization or a governmental unit, and such
use isn’t consistent with the requirement for qualified
501(c)(3) bonds under section 145, the section 501(c)(3)
organization is considered to have received unrelated
business income in the amount of the greater of the actual
rental income or the fair rental value of the property for the
period it is used. No deduction is allowed for interest on
the private activity bond. Report the greater of the actual
rent or the fair rental value on Schedule A (Form 990-T),
Part I, line 12. Report allowable deductions on Schedule A
(Form 990-T), Part II. See sections 150(b)(3) and (c).
PFIC shareholders. If the organization is a direct or
indirect shareholder of a PFIC within the meaning of
section 1297, it may have income tax consequences
under section 1291 upon the disposition of the PFIC stock
or on the receipt of an excess distribution from the PFIC,
described in section 1291(a). The organization may have
current income under section 1293 if the PFIC is a QEF
with respect to the organization. The organization may
also have current income under section 1296 if it makes a
section 1296 mark-to-market election with respect to the
PFIC stock.
Include on Schedule A (Form 990-T), Part I, line 12, the
portion of an excess distribution (or gain treated as an
excess distribution), section 1293 inclusion, or section
1296 inclusion that is taxable as UBTI. See Form 8621.
See the Instructions for Form 990-T, Part II, line 4, for
reporting the deferred tax amount that may be owed by
the organization with respect to an excess distribution (or
gain treated as an excess distribution).
Total Unrelated Trade or Business Income
Line 13. Use the amount from Schedule A (Form 990-T),
Part I, line 13, column (C), in the computation of UBTI in
Schedule A (Form 990-T), Part II, line 16.
Part II. Deductions Not Taken
Elsewhere
If the aggregate sum of the amounts on all Schedules A
(Form 990-T), Part I, line 13, column (A), is $10,000 or
less, you don’t have to complete Schedule A (Form
990-T), Part II, lines 1 through 14. However, you must
complete the remainder of Schedule A (Form 990-T), Part
II and include the larger of each total from Schedule A
(Form 990-T), Part II, line 18, or zero, in the computation of
the amount reported on Part I, line 1, of Form 990-T.
Note: Only expenses directly connected with the
unrelated trade or business income reported on the
Schedule A (Form 990-T) for that particular unrelated
trade or business may be deducted on that Schedule A
(Form 990-T) (see Directly connected expenses, later, in
Appendix A). Don’t separately include in Schedule A
(Form 990-T), Part II, any expenses that are reported in
Schedule A (Form 990-T), Parts III through IX, other than
24
excess exempt expenses entered on Schedule A (Form
990-T), Part II, line 12, and excess readership costs
entered on Schedule A (Form 990-T), Part II, line 13. For
example, officers’ compensation allocable to advertising
income is reported on Schedule A (Form 990-T), Part IX,
only and shouldn’t be included on Schedule A (Form
990-T), Part X, or Schedule A (Form 990-T), Part II, line 1.
Limitations on Deductions
The following items discuss certain areas in which the
deduction may be limited.
Activities Lacking a Profit Motive
In some instances, it is necessary to report income
whether or not it comes from a trade or business
(including interest, annuities, royalties, and rents from
controlled organizations, and income of a section 501(c)
(7), (9), or (17) organization other than exempt function
income). If income is attributable to an activity lacking a
profit motive, then a net loss from the activity can’t be
claimed on Form 990-T. Therefore, in Part I, column (B),
and Part II, the total of deductions for expenses directly
connected with income from an activity lacking a profit
motive is limited to the amount of that income. Generally,
an activity lacking a profit motive is one that isn’t
conducted for the purpose of producing a profit or one that
has consistently produced losses when both direct and
indirect expenses are taken into account.
Deductions Related to Property Leased to
Tax-Exempt Entities
For property leased to a governmental or other tax-exempt
entity, or in the case of property acquired after March 12,
2004, that is treated as tax-exempt-use property other
than by reason of a lease, the organization may not claim
deductions related to the property when they exceed the
organization’s income from the lease payments. Amounts
disallowed may be carried over to the next year and
treated as a deduction concerning the property. See
section 470.
Transactions Between Related Taxpayers
Generally, an accrual basis taxpayer may deduct business
expenses and interest owed to a related party only in the
year the payment is included in the income of the related
party. See sections 163(e)(3) and 267 for limitations on
deductions for unpaid interest and expenses.
Preference Items
Corporations may be required to adjust deductions for
depletion of iron ore and coal, intangible drilling and
exploration and development costs, and the amortizable
basis of pollution control facilities. See section 291 to
determine the amount of the adjustment.
Instructions for Form 990-T (2025)
Section 263A Uniform Capitalization Rules
These rules require organizations to capitalize or include
as inventory cost certain costs incurred in connection with
the following.
• The production of real property and tangible personal
property held in inventory or held for sale in the
ordinary course of business.
• Real property or personal property held in inventory
(tangible and intangible) acquired for resale.
• The production of real property and tangible personal
property produced by the organization for use in its
trade or business or in an activity engaged in for profit.
Tangible personal property produced by an
organization includes a film, sound recording, videotape,
book, or similar property.
supplies that aren’t incidental. See Schedule A (Form
990-T), Part III. Cost of Goods Sold, later.
See Regulations sections 1.263A-1 through 1.263A-3.
Travel, Meals, and Entertainment
Subject to the limitations and restrictions discussed below,
an organization can deduct ordinary and necessary travel,
meals, and non-entertainment expenses paid or incurred
in its trade or business. Generally, entertainment
expenses, membership dues, and facilities used in
connection with these activities can’t be deducted. In
addition, no deduction is generally allowed for qualified
transportation fringe benefits. Special rules apply to
deductions for gifts, luxury water travel, and convention
expenses. See section 274 and Pub. 463, Travel, Gift, and
Car Expenses.
Indirect expenses. Organizations subject to the section
263A uniform capitalization rules are required to capitalize
direct costs and an allocable part of most indirect costs
(including taxes) that benefit the assets produced or
acquired for resale or are incurred by reason of the
performance of production or resale activities.
For inventory, some of the indirect expenses that must
be capitalized are:
• Administration expenses;
• Taxes;
• Depreciation;
• Insurance;
• Compensation paid to officers attributable to services;
• Rework labor; and
• Contributions to pension, stock bonus, and certain
profit-sharing, annuity, or deferred compensation
plans.
Qualified transportation fringes (QTFs). Generally, no
deduction is allowed under section 274(a)(4) for QTFs
provided by employers to their employees. QTFs are
defined in section 132(f)(1) and include:
• Transportation in a commuter highway vehicle
between the employee’s residence and place of
employment,
• Any transit pass, and
• Qualified parking.
Regulations section 1.263A-1(e)(3) specifies other
indirect costs that relate to production or resale activities
that must be capitalized and those that may be currently
deductible.
Meals. Generally, the organization can deduct only 50%
of the amount otherwise allowable for
non-entertainment-related meal expenses paid or incurred
in an unrelated trade or business. Meals not separately
stated from entertainment are generally not deductible. In
addition (subject to exceptions under section 274(k)(2)):
• Meals mustn’t be lavish or extravagant, and
• An employee of the organization must be present at
the meal.
Interest expense. Interest expense paid or incurred
during the production period of designated property must
be capitalized and is governed by special rules. See
Regulations section 1.263A-8 through 1.263A-15.
When are section 263A capitalized costs deductible?
The costs required to be capitalized under section 263A
aren’t deductible until the property (to which the costs
relate) is sold, used, or otherwise disposed of by the
organization.
Exceptions. Section 263A doesn’t apply to:
• Personal property acquired for resale if the
organization’s average annual gross receipts for the 3
prior tax years were $10 million or less;
• Timber;
• Most property produced under long-term contract;
• Certain property produced in a farming business;
• Research and experimental costs under section 174;
• Geological and geophysical costs amortized under
section 167(h);
• Intangible drilling costs for oil, gas, and geothermal
property;
• Mining exploration and development costs; and
• Inventory of an organization that accounts for
inventories in the same manner as materials and
Instructions for Form 990-T (2025)
See section 274, Pub. 15-B, and Pub. 535 for details.
Travel. The organization can’t deduct travel expenses of
any individual accompanying an organization’s officer or
employee, including a spouse or dependent of the officer
or employee, unless:
• That individual is an employee of the organization, and
• Their travel is for a bona fide business purpose and
would otherwise be deductible by that individual.
Membership dues. The organization can deduct
amounts paid or incurred for membership dues in civic or
public service organizations, professional organizations
(such as bar and medical associations), business
leagues, trade associations, chambers of commerce,
boards of trade, and real estate boards. However, no
deduction is allowed if a principal purpose of the
organization is to entertain or provide entertainment
facilities for members or their guests. In addition,
organizations can’t deduct membership dues in any club
organized for business, pleasure, recreation, or other
social purpose. This includes country clubs, golf and
athletic clubs, airline and hotel clubs, and clubs operated
to provide meals under conditions favorable to business
discussion.
Entertainment facilities. The organization can’t deduct
an expense paid or incurred for use of a facility (such as a
25
yacht or hunting lodge) for an activity usually considered
entertainment, amusement, or recreation.
Amounts treated as compensation. The organization
may generally be able to deduct otherwise non-deductible
travel, meals, and entertainment expenses if the amounts
are treated as compensation and reported on Form W-2
for an employee or Form 1099-NEC for an independent
contractor and if the total amount of such compensation
isn’t unreasonable.
Reducing Certain Expenses for Which Credits
Are Allowable
If the organization claims certain credits, it may need to
reduce the otherwise allowable deductions for expenses
used to figure the credit. This applies to credits such as
the following.
• Disabled access credit.
• Employer credit for social security and Medicare taxes
paid on certain employee tips.
• Credit for employer-provided childcare facilities and
services.
• Orphan drug credit.
• Credit for small employer pension plan startup costs.
• Employer credit for paid family and medical leave.
If the organization has any of these credits, figure each
current-year credit before figuring the deduction for
expenses on which the credit is based.
Business Startup and Organizational Costs
For business startup and organizational costs paid or
incurred after September 8, 2008, an organization can
deduct up to $5,000 of such costs in the year it begins
business (unless the organization elects to capitalize the
full amount of such costs). The $5,000 deduction is
reduced (but not below zero) by the amount the total costs
exceed $50,000. If the total costs are $55,000 or more, the
deduction is reduced to zero. Any costs not deducted
must be amortized, as explained below.
Note: For startup and organizational costs paid or
incurred after September 8, 2008, the organization isn’t
required to attach a statement or specifically identify the
amount deducted for the election under sections 195(b)
and 248(a) to be effective. It is a deemed election.
Whether an organization deducts a portion of its startup
and organizational costs under Regulations sections
1.195-1 and 1.248-1 or elects to amortize the full amount
of such costs, its election is irrevocable. For startup and
organizational costs paid or incurred after October 22,
2004, and before September 9, 2008, an organization
must generally attach the statement required by
Regulations sections 1.195-1(b) and 1.248-1(c) to make
the election to deduct a portion of such costs (as
explained above). This election is irrevocable. However,
an organization can apply the provisions of these
regulations to costs paid or incurred after October 22,
2004.
Amortization. Any costs not deducted under the above
rules must be amortized ratably over the 180-month
period, beginning with the month the organization begins
business. See the Instructions for Form 4562,
Depreciation and Amortization, for details. If the
26
association elected to amortize business startup and
organizational costs paid or incurred before October 23,
2004, over a period of 60 months or more, it must continue
to amortize those costs over the elected amortization
period. Report the deductible amount of these costs and
any amortization on Schedule A (Form 990-T), Part II,
line 14. For amortization that began during the tax year,
complete and attach Form 4562.
Repairs and Maintenance
Line 3. Enter the cost of incidental repairs and
maintenance not claimed elsewhere on the return, such
as labor and supplies, that don’t add to the value or
appreciably prolong the life of the property.
Bad Debts
Line 4. Enter the total receivables from an unrelated
trade or business that were previously included in taxable
income and that became worthless in whole or in part
during the tax year.
Interest
Line 5. Attach a separate statement listing the interest
being claimed on this line.
Interest allocation. If the proceeds of a loan were
used for more than one purpose (for example, to purchase
a portfolio investment and to acquire an interest in a
passive activity), an interest allocation must be made. See
Temporary Regulations section 1.163-8T for the interest
allocation rules.
Tax-exempt interest. Don’t include interest on
indebtedness incurred or continued to purchase or carry
obligations on which the interest income is totally exempt
from income tax. For exceptions, see section 265(b).
Prepaid interest. Generally, a cash basis taxpayer
can’t deduct prepaid interest allocable to years following
the current tax year, for example, during the tax year a
cash basis taxpayer prepaid interest on a loan. The
taxpayer can deduct only that part of the prepaid interest
that was for the use of the loaned funds during the tax
year, not for the use of the loaned funds during the
subsequent years.
Straddle interest. Generally, the interest and carrying
charges on straddles can’t be deducted and must be
capitalized. See section 263(g).
Original issue discount. See section 163(e)(5) for
special rules for the disqualified portion of original issue
discount on a high-yield discount obligation.
Interest on certain underpayments of tax. Don’t
deduct interest paid or incurred on any portion of an
underpayment of tax that is attributable to an
understatement arising from an undisclosed listed
transaction or an undisclosed reportable avoidance
transaction (other than a listed transaction) entered into in
tax years beginning after October 22, 2004.
Interest allocable to the production of designated
property. Don’t deduct interest on debt allocable to the
production of designated property. Interest that is
allocable to such property produced by an organization for
its own use or for sale must be capitalized. An
organization must also capitalize any interest on debt
allocable to an asset used to produce the earlier property.
Instructions for Form 990-T (2025)
See section 263A(f) and Regulations sections 1.263A-8
through 1.263A-15.
Interest on below-market loans. See section 7872
for special rules regarding the deductibility of foregone
interest on certain below-market-rate loans.
Limitation on deduction of business interest.
Business interest expense is limited to the sum of
business interest income, 30% of the adjusted taxable
income, and floor plan financing interest. Business
interest expense includes any interest paid or accrued on
indebtedness properly allocable to an unrelated trade or
business. A taxpayer, other than a tax shelter, that meets
the gross receipts test isn’t required to limit business
interest expense under section 163(j). A taxpayer meets
the gross receipts test if the taxpayer has average annual
gross receipts that are taken into account in determining
its UBTI of $31 million or less for the 3 prior tax years.
Gross receipts include the aggregate gross receipts from
all persons treated as a single employer such as a
controlled group of corporations, commonly controlled
partnerships or proprietorships, and affiliated service
groups. If the taxpayer fails to meet the gross receipts test,
Form 8990 is generally required.
Taxes and Licenses
Line 6. Enter taxes and license fees paid or accrued
during the year, but don’t include the following taxes.
• Federal income taxes.
• Foreign or U.S. territory income taxes if a foreign tax
credit is claimed.
• Taxes not imposed on your organization.
• Taxes, including state or local sales taxes, paid or
incurred in connection with an acquisition or
disposition of property. These taxes must be treated
as part of the cost of the acquired property or, in the
case of a disposition, as a reduction in the amount
realized on the disposition.
• Taxes assessed against local benefits that increase
the value of the property assessed (such as for
paving, etc.).
• Taxes deducted elsewhere on the return, such as
those reflected in cost of goods sold.
See section 164(d) for apportionment of taxes on real
property between the buyer and seller.
Depreciation
Line 7. Besides depreciation, include on line 7 the part of
the cost, under section 179, that the organization elected
to expense for certain tangible property placed in service
during the tax year or carried over from the prior tax year.
See Form 4562 and its instructions.
Depletion
Line 9. See sections 613 and 613A for percentage
depletion rates for natural deposits. Attach Form T
(Timber), Forest Activities Schedules, if a deduction is
taken for depletion of timber.
Contributions to Deferred Compensation Plans
Line 10. Employers who maintain pension, profit-sharing,
or other funded deferred compensation plans are
generally required to file Form 5500. This requirement
Instructions for Form 990-T (2025)
applies whether or not the plan is qualified under the Code
and whether or not a deduction is claimed for the current
tax year. Section 6652(e) imposes a penalty for late filing
of these forms. In addition, there is a penalty for
overstating the pension plan deduction. See section
6662(f).
Employee Benefit Programs
Line 11. Enter the amount of contributions to employee
benefit programs (such as insurance, health, and welfare
programs) that aren’t an incidental part of a deferred
compensation plan included on Schedule A (Form 990-T),
Part II, line 10.
Excess Exempt Expenses
Line 12. Enter the amount computed on Schedule A
(Form 990-T), Part VIII, line 7 (if applicable), on
Schedule A (Form 990-T), Part II, line 12.
Excess Readership Costs
Line 13. Enter the amount computed on Schedule A
(Form 990-T), Part IX, line 8a (if applicable), on
Schedule A (Form 990-T), Part II, line 13.
Other Deductions
Line 14. Enter on this line the deduction taken for
amortization (see Form 4562) as well as other authorized
deductions for which no space is provided on the return.
Attach a statement listing the deductions claimed on this
line. On each Schedule A (Form 990-T), deduct only items
directly connected with the unrelated trade or business for
which income is reported on that Schedule A (Form
990-T).
Extraterritorial income exclusion. Complete Form
8873 and include the deduction from line 52 in other
deductions reported on Schedule A (Form 990-T), Part II,
line 14.
Don’t deduct fines or penalties paid to a government for
violating any law. The exclusion was repealed generally for
transactions after 2004, with some exceptions. See Form
8873 and its instructions.
Net Operating Loss (NOL) Deduction Arising in
Tax Years Beginning On or After January 1, 2018
Line 17. The NOL deduction is the NOL carryover and
carrybacks that can be deducted in the tax year with
regard to each separate trade or business. To be
deductible, an NOL must have been incurred in an
unrelated trade or business activity. See section 172(a).
Tax Cuts and Jobs Act amendments to section 172.
Section 13302 of the Tax Cuts and Jobs Act amended
section 172 for tax years ending after 2017, to eliminate
NOL carrybacks except for certain farming losses and
NOLs of insurance companies other than life insurance
companies. See section 172(b), as amended by the Tax
Cuts and Jobs Act. Also, see Pub. 225, Farmer’s Tax
Guide; Pub. 536, Net Operating Losses for Individuals,
Estates, and Trusts; and Pub. 542, Corporations, for
additional information. The Tax Cuts and Jobs Act also
amended section 172(a)(2) to limit the allowable NOL
27
deduction to 80% of taxable income (calculated as
described in section 172(a)(2)).
Instructions for line 17. Enter on Schedule A (Form
990-T), Part II, line 17, the NOL carryover from other tax
years attributable to that trade or business, but don’t enter
more than the amount shown on Schedule A (Form
990-T), Part II, line 16. An organization that claims the
deduction with respect to any NOL carried through tax
years for which the organization was not required to file
Form 990-T must show the amount of the deduction and
how it was computed, but the organization need not file a
Form 990-T in order to preserve an NOL carryover. See
Regulations section 1.512(a)-6(h)(3) for treatment of
suspended NOLs resulting from the termination, sale,
exchange, or other disposition of a separate unrelated
trade or business. After offsetting any gain resulting from
the termination, sale, exchange, or disposition of a
separate unrelated trade or business, any NOL remaining
is suspended. However, the suspended NOLs may be
used if that previous separate unrelated trade or business
is later resumed or if a new unrelated trade or business
that is accurately identified using the same NAICS 2-digit
code as the previous separate unrelated trade or business
is commenced or acquired in a future tax year.
The amount of an NOL carryover is determined under
section 172. See Regulations section 1.512(b)-1(e) and,
for organizations with more than one unrelated trade or
business, Regulations section 1.512(a)-6(h). Attach a
statement showing the computation of the NOL deduction.
Unrelated Business Taxable Income
Line 18. Use the greater of the amount computed on
line 18 or zero in the computation of UBTI on Form 990-T,
Part I, line 1. A net loss calculated on any Schedule A
(Form 990-T), Part II, line 18, can’t be used to offset gain
on any other Schedule A (Form 990-T). Accordingly, a net
loss on a Schedule A (Form 990-T) should be treated as
zero to calculate the amount reported on Form 990-T, Part
I, line 1.
Part III. Cost of Goods Sold
Generally, inventories are required at the beginning and
end of each tax year if the production, purchase, or sale of
merchandise is an income-producing factor. See
Regulations section 1.471-1.
However, if the organization is a qualifying taxpayer or a
qualifying small business taxpayer, it may adopt or change
its accounting method to account for inventoriable items in
the same manner as materials and supplies that aren’t
incidental (unless its business is a tax shelter (as defined
in section 448(d)(3))).
A qualifying taxpayer is a taxpayer that, for each prior
tax year ending after December 16, 1998, has average
annual gross receipts of $1 million or less for the
3-tax-year period ending with that prior tax year.
A qualifying small business taxpayer is a taxpayer (a)
that has average annual gross receipts of $31 million or
less for the 3-tax-year period ending with that prior tax
year, and (b) whose principal business activity isn’t an
ineligible activity.
Under this accounting method, inventory cost for raw
materials purchased for use in producing finished goods
28
and merchandise purchased for resale are deductible in
the year the finished goods or merchandise are sold (but
not before the year the organization paid for the raw
materials or merchandise, if it is also using the cash
method). For additional guidance on this method of
accounting for inventoriable items, see Pub. 538 and the
Instructions for Form 3115.
Enter amounts paid for all raw materials and
merchandise during the tax year on Schedule A (Form
990-T), Part III, line 2. The amount the organization can
deduct for the tax year is figured on Schedule A (Form
990-T), Part III, line 8.
All filers not using the cash method of accounting
should see Section 263A Uniform Capitalization Rules
under Limitations on Deductions, earlier, before
completing Schedule A (Form 990-T). The instructions for
lines 1, 4, 5, and 7, later, apply to Part III earlier, before
completing Schedule A (Form 990-T).
Inventory valuation methods. Inventories can be
valued at:
1. Cost, as described in Regulations section 1.471-3,
2. Lower of cost or market, as described in Regulations
section 1.471-4, or
3. Any other method approved by the IRS that conforms
to the requirements of the applicable regulations cited
below.
However, if the organization is using the cash method
of accounting, it is required to use cost.
A small producer is an organization whose average
annual gross receipts are $1 million or less. Small
producers that account for inventories in the same manner
as materials and supplies that aren’t incidental may
currently deduct expenditures for direct labor and all
indirect costs that would otherwise be included in
inventory costs.
The average cost (rolling average) method of valuing
inventories generally doesn’t conform to the requirement
of the regulations. See Rev. Rul. 71-234, 1971-1 C.B. 148.
Organizations that use erroneous valuation methods
must change to a method permitted for federal income tax
purposes. File Form 3115 to make this change.
Inventory may be valued below cost when the
merchandise is unsalable at normal prices or unusable in
the normal way because the goods are subnormal
because of damage, imperfections, shop wear, etc., within
the meaning of Regulations section 1.471-2(c). The goods
may be valued at the bona fide selling price, minus direct
cost of disposition (but not less than scrap value). Bona
fide selling price means actual offering of goods during a
period ending not later than 30 days after inventory date.
If this is the first year, the last-in first-out (LIFO)
inventory method was either adopted or extended to
inventory goods not previously valued under the LIFO
method provided in section 472, attach Form 970,
Application To Use LIFO Inventory Method, or a statement
with the information required by Form 970.
If the organization changed or extended its inventory
method to LIFO and had to write up the opening inventory
to cost in the year of election, report the effect of this
Instructions for Form 990-T (2025)
write-up as other income (on Schedule A (Form 990-T),
Part I, line 12) proportionately over a 3-year period that
begins in the tax year the LIFO election was made
(section 472(d)).
Inventory at Beginning of Year
Line 1. If the organization is changing its method of
accounting to no longer account for inventories, it must
refigure last year’s closing inventory using the new method
of accounting and enter the result on Schedule A (Form
990-T), Part III, line 1. If there is a difference between last
year’s closing inventory and the refigured amount, attach
an explanation and take it into account when figuring the
organization’s section 481(a) adjustment (explained
earlier).
Additional Section 263A Costs
Line 4. An entry is required on this line only for
organizations that have elected a simplified method of
accounting.
For organizations that have elected the simplified
production method, additional section 263A costs are
generally those costs, other than interest, that are now
required to be capitalized under section 263A but that
weren’t capitalized under the organization’s method of
accounting immediately prior to the effective date of
section 263A. For details, see Regulations section
1.263A-2(b).
For organizations that have elected the simplified
resale method, additional section 263A costs are
generally those costs incurred with respect to the following
categories.
• Off-site storage or warehousing.
• Purchasing.
• Handling, such as processing, assembling,
repackaging, and transporting.
• General and administrative costs (mixed service
costs).
For details, see Regulations section 1.263A-3(d).
Enter on Schedule A (Form 990-T), Part III, line 4, the
balance of section 263A costs paid or incurred during the
tax year not included on Schedule A (Form 990-T), Part III,
lines 2 and 3.
Other Costs
Line 5. Enter on Schedule A (Form 990-T), Part III, line 5,
any costs paid or incurred during the tax year not entered
on Schedule A (Form 990-T), Part III, lines 2 through 4.
Attach a statement describing the other costs.
Inventory at End of Year
Line 7. See Regulations sections 1.263A-1 through
1.263A-3 for details on figuring the amount of additional
section 263A costs to be included in ending inventory.
If the organization accounts for inventories in the same
manner as materials and supplies that aren’t incidental,
enter on Schedule A (Form 990-T), Part III, line 7, the
portion of its raw materials and merchandise purchased
for resale that are included on Schedule A (Form 990-T),
Part III, line 6, and weren’t sold during the year.
Instructions for Form 990-T (2025)
Part IV. Rent Income
Section 501(c)(7), (9), and (17) organizations, enter gross
rents on Schedule A (Form 990-T), Part I, line 6, and
applicable expenses on Schedule A (Form 990-T), Part II,
lines 1 through 14. All rents except those that are exempt
function income must be included.
All organizations that have applicable rent income,
other than section 501(c)(7), (9), and (17) organizations,
should complete Schedule A (Form 990-T), Part IV. For
organizations other than section 501(c)(7), (9), and (17)
organizations, only the following rents are taxable on
Schedule A (Form 990-T), Part I, line 6.
1. Rents from personal property leased with real
property, if the rents from the personal property are
more than 10% of the total rents received or accrued
under the lease, determined at the time the personal
proper
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