Instructions For Schedule K (Form 990) - Supplemental Information On Tax-Exempt Bonds - 2016 Page 4
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5Part III. Private Business
contract provides for compensation for
organization has determined meets the
services rendered with compensation
safe harbor under Rev. Proc. 97-13, or
Use
based, in whole or in part, on a share of
otherwise doesn't result in private
Complete for bond issues listed in rows A
net profits from the operation of the facility.
business use. Similarly, don't include any
through D of Part I, other than listed bond
See Regulations section 1.141-3(b)(4).
use relating to a research agreement
issues that are post-December 31, 2002,
identified on line 3c that the organization
Line 3b. If line 3a was checked “Yes,”
refunding issues which refund
has determined meets the safe harbor
check “Yes” or “No” to indicate if, during
pre-January 1, 2003, bond issues directly
under Rev. Proc. 2007-47, or otherwise
the 12-month period used to report on the
or through a series of refundings. For this
doesn't result in private business use.
bond issue, the organization routinely
purpose, a refunding bond issue also
engaged bond counsel or other outside
Line 5. Enter the average percentage
includes allocation and treatment of bonds
counsel to review any management or
during the year of the property financed by
of a multipurpose issue as a separate
service contracts relating to the financed
the bond issue that was used in an
refunding issue under Regulations section
property.
unrelated trade or business activity (a
1.141-13(d). Complete multiple schedules
private business use) by the
if necessary to account for all outstanding
Line 3c. Check “Yes” or “No” to indicate if
organization, another section 501(c)(3)
tax-exempt bond issues.
any research agreement that may result in
organization, or a state or local
private business use was effective at any
governmental unit. See Regulations
The organization may omit from Part III
time during the year for property financed
section 1.141-3(g)(4). Enter the yearly
information with respect to any bond issue
by the bond issue. For this purpose,
average percentage rounded to the
reported in Part I that is a qualified private
answer “Yes” even if the organization has
nearest tenth of a percentage point (for
activity bond other than a qualified 501(c)
determined that the research agreement
example, 8.9%).
(3) bond. For any other qualified private
meets the safe harbor under Rev. Proc.
activity bonds, in Part VI the organization
2007-47, 2007-29 I.R.B. 108, available at
Line 7. Check “Yes” or “No” to indicate
must identify the issue by reference to
,
whether, as of the end of the 12-month
rows A through D of Part I, as applicable,
and will not result in actual private
period used to report on the bond issue,
and identify the type of qualified private
business use. An agreement by a
the bond issue met the private security or
activity bond.
nongovernmental person to sponsor
payment test of section 141(b)(2), as
research performed by the organization
modified by section 145 to apply to
Line 1. Check “Yes” or “No” to indicate if
can result in private business use of the
qualified 501(c)(3) bonds. Generally, a
the organization was at any time during
property used for the research, based on
qualified 501(c)(3) bond issue will meet
the reporting period a partner in a
all the facts and circumstances. A
the private security or payment test if more
partnership or a member of a limited
research agreement for the financed
than 5% of the payment of principal or
liability company which both owned
property will generally result in private
interest on the bond issue is either made
property that was financed by the bond
business use of that property if the
or secured (directly or indirectly) by
issue and included as partner(s) or
sponsor is treated as the lessee or owner
payments or property used or to be used
member(s) entities other than a section
of financed property for federal income tax
for a private business use. See
501(c)(3) organization.
purposes. See Regulations section
Regulations sections 1.141-4 and 1.145-2.
Line 2. Check “Yes” or “No” to indicate if
1.141-3(b)(6).
Line 8a. Check "Yes" or "No" to indicate
any lease arrangements that may result in
Line 3d. If line 3c was checked “Yes,”
whether the owner of any of the financed
private business use were effective at
check “Yes” or “No” to indicate if, during
property sold or transferred the property to
any time during the year with respect to
the 12-month period used to report on the
an entity other than a state or local
property financed by the bond issue. The
bond issue, the organization routinely
governmental unit or another section
lease of financed property to a
engaged bond counsel or other outside
501(c)(3) organization. For this purpose,
nongovernmental person other than a
counsel to review any research
report sales and transfers on a cumulative
section 501(c)(3) organization is generally
agreements relating to the financed
basis since the issuance of the bonds.
private business use. Lease arrangements
property.
that constitute unrelated trade or business
Line 8b. If line 8a was checked "Yes,"
of the lessor, or that are for an unrelated
Line 4. Enter the average percentage
report the percentage of property sold or
trade or business of a section 501(c)(3)
during the year of the property financed by
transferred, including prior transfers on a
organization lessee, may also result in
the bond issue that was used in a private
cumulative basis, since the issuance of
private business use. See Regulations
business use by a nongovernmental
the bonds.
sections 1.141-3(b)(3) and 1.145-2(b)(1).
person other than a section 501(c)(3)
Line 8c. If line 8a was checked "Yes,"
organization. See Regulations section
Line 3a. Check “Yes” or “No” to indicate if
state whether the organization took any
1.141-3(g)(4). The average percentage is
any management or service contract that
remedial actions under the applicable
determined by comparing (i) the amount of
may result in private business use was
regulations with respect to any
private business use (see Definitions,
effective at any time during the year with
nonqualified bonds that may have resulted
earlier) during the year to (ii) the total
respect to property financed by the bond
from the transfer.
amount of private business use and use
issue. For this purpose, answer “Yes”
that isn't private business use during that
Line 9. Check "Yes" or "No" to indicate
even if the organization has determined
whether the organization has established
year. Don't include costs of issuance
that the management or service contract
reported in Part II in the amount of
written procedures to ensure timely
meets the safe harbor under Rev. Proc.
property used in a private business use
remedial action with respect to all
97-13, 1997-1 C.B. 632, and will not result
(clause (i) of the preceding sentence), but
nonqualified bonds in accordance with
in actual private business use. A
do include such costs in the total amount
Regulations sections 1.141-12 and
management or service contract for the
1.145-2 or other additional remedial
of use (clause (ii)). Enter the yearly
financed property can result in private
average percentage to the nearest tenth of
actions authorized by the Commissioner
business use of the property, based on all
a percentage point (for example, 8.9%).
under Regulations section 1.141-12(h).
facts and circumstances. A management
For this purpose, don't include any use
Answer "Yes" only if the procedures
or service contract for the financed
applied to the bond issue during the
relating to either a management or service
property generally results in private
contract identified on line 3a that the
business use of that property if the
2016 Instructions for Schedule K (Form 990)
-4-
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