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2016

Department of the Treasury

Internal Revenue Service

Instructions for Schedule K

(Form 990)

Supplemental Information on Tax-Exempt Bonds

subsidiary) should report the liability on

organization can use any other 12-month

Section references are to the Internal Revenue

Code unless otherwise noted.

Form 990 and the Schedule K. Similarly, if

period or periods selected by the

a parent organization loans or allocates

organization and which, used consistently

Future Developments

the proceeds of a tax-exempt bond issue

for a tax-exempt liability for purposes of

to a group of subsidiary organizations,

this schedule and computations, is in

For the latest information about

only one level (either the parent or the

accordance with the requirements under

developments related to Schedule K

group of subsidiaries) should report the

sections 141 through 150. Under this

(Form 990) and its instructions, such as

liability on Form 990 and the Schedule K.

alternative, the organization can use

legislation enacted after they were

For this purpose, if the subsidiary

different 12-month periods for each

published, go to

organizations report the liability, each

tax-exempt liability reported. The

subsidiary should only report the amount it

alternative period(s) must be specifically

General Instructions

is loaned or allocated.

described in Part VI.

If the organization's bond liability

Specific Instructions

Note. Terms in bold are defined in the

relates to a pooled financing issue, the

Glossary of the Instructions for Form 990,

organization should report with respect to

Return of Organization Exempt From

Definitions

the amount of the issue that the

Income Tax.

organization is loaned or allocated.

Tax-exempt bond. This is an

Purpose of Schedule

Use Part VI to provide additional

obligation issued by or on behalf of a

information or comments relating to the

governmental issuer for which the

Schedule K (Form 990) is used by an

information provided on this schedule. For

interest paid is excluded from the holder's

organization that files Form 990 to provide

example, use Part VI to provide additional

gross income under section 103. For this

certain information on their outstanding

information or comments about the

purpose, a bond can be in any form of

liabilities associated with tax-exempt

reporting of liabilities by related

indebtedness under federal tax law,

bond issues. Usually, a bond issue

organizations. In addition, an organization

including a bond, note, loan, or

associated with an organization will be

can use Part VI to describe certain

lease-purchase agreement.

issued as qualified 501(c)(3) bonds, but all

assumptions which are used to complete

types of tax-exempt bond issues

Bond issue. This is an issue of two or

Schedule K (Form 990) when the

benefiting the organization are to be

more bonds which are sold at substantially

information provided isn't fully supported

reported. A qualified 501(c)(3) bond issue

the same time; sold pursuant to the same

by existing records.

consists of bonds, the proceeds of which

plan of financing; and payable from the

are used by a section 501(c)(3)

Who Must File

same source of funds. See Regulations

organization to further its charitable

section 1.150-1(c).

An organization that answered “Yes” on

purpose. Requirements generally

Form 990, Part IV, Checklist of Required

applicable to qualified 501(c)(3) bonds

Governmental issuer. A state or local

Schedules, question 24a, must complete

under section 145 include the following.

governmental unit that issues

and attach Schedule K to Form 990. This

All property financed by the bond issue

tax-exempt bonds.

means the organization reported an

is to be owned by a section 501(c)(3)

Gross proceeds. This generally

outstanding tax-exempt bond issue that:

organization or a state or local

means any sale proceeds, investment

Had an outstanding principal amount in

governmental unit.

proceeds, transferred proceeds, and

excess of $100,000 as of the last day of

At least 95% of the net proceeds of the

replacement proceeds of an issue. See

the tax year, and

bond issue are used by either a state or

Regulations sections 1.148-1(b) and

Was issued after December 31, 2002.

local governmental unit or a section 501(c)

1.148-1(c).

(3) organization in activities which don't

Up to four separate outstanding

constitute unrelated trades or

Pooled financing issue. This is a

tax-exempt liabilities can be reported on

businesses (determined by applying

bond issue from which more than $5

each Schedule K (Form 990). The

section 513).

million of proceeds will be used to make

schedule can be duplicated, if needed to

loans to two or more conduit borrowers.

report more than four tax-exempt

If the organization has one or more

liabilities. If the organization isn't required

related organizations (for example,

Proceeds. This generally means the

to file Form 990 but chooses to do so, it

parent and subsidiary relationship), it must

sale proceeds of an issue (other than

must file a complete return and provide all

complete Schedule K (Form 990)

those sale proceeds used to retire bonds

of the information requested, including the

consistent with the filing(s) of its related

of the issue that aren't deposited in a

required schedules.

reasonably required reserve or

organization(s). The same liability

shouldn't be reported by more than one of

replacement fund). Proceeds also include

Period Covered

the related organizations. For example, if

any investment proceeds from

a parent organization issues a

The organization can complete this

investments that accrue during the project

tax-exempt bond and loans or allocates

schedule for any tax-exempt liability using

period (net of rebate amounts attributable

that issue to a subsidiary organization,

the same period as the Form 990 with

to the project period). See Regulations

section 1.141-1(b).

only one organization (either the parent or

which it is filed. Alternatively, the

May 24, 2016

Cat. No. 20378D

Instructions For Schedule K (Form 990) - Supplemental Information On Tax-Exempt Bonds - 2016

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