Form 990-T Filing Checklist for Tax Year 2015
Overview
The 2015 Form 990-T adheres to the standard unrelated business taxable income framework, excluding new stimulus programs, ACA reconciliation, and TCJA provisions. The form applies a specific deduction of generally $1,000 on Part II, line 29. Corporations within controlled groups are required to mark the box on Part III, line 2, and affix Schedule O, which illustrates the distribution of taxable income brackets.
Applicability and Credits
Form 990-T applies exclusively to tax-exempt organizations with unrelated business income, including section 501(c) corporations and trusts, section 401(a) trusts, and certain other trust entities.
Available credits are limited to foreign tax credit using Form 1118 for corporations or Form 1116 for trusts, general business credit using Form 3800, prior-year minimum tax credit using Form 8801 or Form 8827, and small employer health insurance premium credit using Form 8941. Personal credits, such as the earned income tax credit and the child tax credit, are not allowed.
Status Verification and Documentation
Organizations must confirm their current tax-exempt status under applicable code sections, as indicated in Part I, Line B. To do so, they should select the appropriate entity type box and obtain a determination letter confirming their ongoing exemption for the 2015 tax year.
Organizations must gather all invoices, sales receipts, revenue reports, and bank statements for 2015. For Schedule A, assemble inventory records, purchase invoices, and payroll records. Obtain Schedule K-1 forms from partnerships and S corporations. Collect brokerage statements and Forms 1099-B for capital gains. Organize documentation by income category.
Deductions and Depreciation
Deductions in Part II must be directly connected with unrelated business income. Gather W-2 forms for compensation on line 13, Schedule K for officer compensation allocation on line 12, repair invoices for line 14, bad debt documentation for line 15, loan documents and interest schedules for line 16, and tax and license payment records for line 17.
Charitable contributions on line 16 are limited to 10% of unrelated business taxable income computed without regard to the charitable deduction, using the amount on line 27 before applying the deduction.
Attach Form 4562 for depreciation. Enter total depreciation on line 19, depreciation claimed on Schedule A on line 20a, and net depreciation on line 20b. Prepare schedules showing asset use in unrelated business versus exempt activities. For depletion on line 21, obtain reserve calculations.
Schedule Completion
Complete Schedule A by entering beginning inventory, purchases, labor costs, section 263A costs, other costs, ending inventory, and cost of goods sold on line 7. Answer the section 263A question on line 8. Transfer the result to Part I, line 2.
Complete Schedule C for rental income and transfer to Part I, line 6.
Complete Schedule E for debt-financed property and transfer to Part I, line 7.
Complete Schedule F for controlled organization income and transfer to Part I, line 8.
Complete Schedule G for investment income and transfer to Part I, line 9.
Complete Schedule I for exploited exempt activity and transfer to Part I, line 10, and Part II, line 26.
Complete Schedule J for advertising income and transfer to Part I, line 11, and Part II, line 27.
Taxable Income Calculation
Combine Part I lines 3 through 12 and enter the total on line 13. Complete deductions on lines 12 through 23 and total them on line 24. Subtract line 24 from line 13 for line 25.
Enter any net operating loss deduction on line 26 if available, limited to line 25. Subtract line 26 from line 25 for line 27. Enter a specific deduction of generally $1,000 on line 29. Subtract line 29 from line 27 to determine unrelated business taxable income on line 30.
Tax Computation
For corporations, calculate income tax using the appropriate rate schedule and enter the result on Part III, line 1. If the organization is part of a controlled group, check the box on line 2 and attach Schedule O showing the apportionment of brackets: the first $50,000 at 15%, the next $25,000 at 25%, and amounts up to $10,000,000 at graduated rates.
For trusts, compute tax using the Form 990-T rate schedule or Schedule D from Form 1041 and enter the result on line 1. Enter proxy tax on line 2 if applicable. Enter alternative minimum tax on line 3. Total tax on line 4.
Credits and Final Tax
Enter foreign tax credit on line 5 with Form 1118 or Form 1116 attached. Enter other allowable credits on line 6. Enter general business credit on line 7 with Form 3800 attached. Enter prior-year minimum tax credit on line 8 with Form 8801 or Form 8827 attached.
Total credits on line 9. Subtract line 9 from Part III, line 4, and enter the result on line 10. Enter other taxes on line 11 with applicable forms attached. Total tax on line 12.
Payments and Filing
Enter the 2014 overpayment credited to 2015 on line 13. Enter 2015 estimated tax payments on line 14. Enter an extension payment on line 15.
Enter foreign withholding on line 16a, backup withholding on line 16b, small employer health credit on line 16c with Form 8941, and other payments on line 16d. Total payments on line 18.
Enter estimated tax penalty on line 19 with Form 2220 if computed. Calculate tax due on line 20 or overpayment on line 21. Allocate the overpayment on line 22 to the 2016 estimated tax or request a refund.
Sign under penalties of perjury with title and date. Paid preparers must sign and include a PTIN. Retain a copy and file according to IRS Where to File instructions for Form 990-T 2015.
10-Step Filing Process
Step 1
Verify the organization type and exempt status by confirming the current tax-exempt status under applicable code sections, checking the appropriate organization type box, and obtaining a determination letter confirming exemption for the 2015 tax year.
Step 2
Gather documentation for unrelated business income, including invoices, sales receipts, revenue reports, bank statements, inventory records for Schedule A, Schedule K-1 forms from partnerships and S corporations, and brokerage statements and Forms 1099-B for capital gains.
Step 3
Document deductions directly connected to unrelated business income by gathering W-2 forms and payroll records for line 13, Schedule K for officer compensation allocation on line 12, repair and maintenance invoices for line 14, bad debt documentation for line 15, loan documents and interest schedules for line 16, and tax and license payment records for line 17.
Step 4
Prepare depreciation and depletion schedules by attaching Form 4562, entering total depreciation on line 19, depreciation claimed on Schedule A on line 20a, calculating net depreciation on line 20b, preparing asset use schedules showing unrelated business versus exempt activity use, and obtaining reserve calculations for depletion on line 21.
Step 5
Complete Schedule A for cost of goods sold by entering beginning inventory, purchases, labor costs, section 263A costs, other costs, ending inventory, computing cost of goods sold on line 7, answering the section 263A question on line 8, verifying inventory valuation method consistency, and transferring the result to Part I, line 2.
Step 6
Complete unrelated business income schedules by preparing Schedule C for rental income, Schedule E for debt-financed property, Schedule F for controlled organization income, Schedule G for investment income, Schedule I for exploited exempt activity, and Schedule J for advertising income, transferring each to the appropriate lines.
Step 7
Calculate unrelated business taxable income by combining Part I lines 3 through 12, completing deductions on lines 12 through 23, applying any net operating loss deduction, entering the specific $1,000 deduction, and determining taxable income on line 30.
Step 8
Compute tax liability by determining corporation or trust status, completing Part III tax calculations, attaching Schedule O if applicable, entering proxy tax and alternative minimum tax if required, and totaling tax.
Step 9
Apply credits by entering foreign tax credit, general business credit, prior-year minimum tax credit, subtracting total credits, entering other taxes, and determining total tax.
Step 10
Record payments, penalties, and final amounts, allocate overpayments if applicable, obtain officer and preparer signatures, and file according to IRS instructions.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
