Instructions For Form 990 And Form 990-Ez - 2003 Page 20
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46Line 3 — Membership dues and
instructions for Part II, column (B), Program
organization aids an unaffiliated organization
services.
with its exempt function.
assessments
Only for purposes of completing this return,
Enter members’ and affiliates’ dues and
Examples. A hospital would report on this
the reporting organization must report any
assessments that are not contributions.
line all of its charges for medical services
rental income received from an affiliated
Dues and assessments received that
(whether to be paid directly by the patients or
exempt organization as program service
compare reasonably with available benefits.
through Medicare, Medicaid, or other
revenue on line 2.
When dues and assessments are received that
third-party reimbursement), hospital parking lot
compare reasonably with membership benefits
fees, room charges, laboratory fees for hospital
Line 6b — Rental expenses
received, report such dues and assessments
patients, and related charges for services.
Enter the expenses paid or incurred for the
on line 3.
income reported on line 6a. Include interest
Program service revenue includes income
Organizations described in section
related to rental property and depreciation if it
earned by the organization for providing a
501(c)(5), (6), or (7) generally provide benefits
is recorded in the organization’s books and
government agency with a service, facility, or
that have a reasonable relationship to dues,
records. Report in column (B) of Part II
product that benefited that government agency
although benefits to members may be indirect.
(Program services) any rental expenses
directly rather than benefiting the public as a
Dues or assessments received that exceed
allocable to rental income reportable as
whole. See the line 1c instructions for reporting
program service revenue on line 2.
the value of available membership benefits.
guidelines when payments are received from a
Whether or not membership benefits are used,
government agency for providing a service,
Line 6c — Net rental income or (loss)
dues received by an organization, to the extent
facility, or product for the primary benefit of the
Subtract line 6b from line 6a. Show any loss in
they are more than the monetary value of the
general public.
parentheses.
membership benefits available to the dues
payer, are a contribution that should be
Program service revenue also includes:
Line 7 — Other investment income
reported on line 1a. See Rev. Rul. 54-565,
tuition received by a school; revenue from
Enter the amount of investment income not
1954-2 C.B. 95 and Rev. Rul. 68-432, 1968-2
admissions to a concert or other performing
reportable on lines 4 through 6 and describe
C.B. 104.
arts event or to a museum; royalties received
the type of income in the space provided or in
as author of an educational publication
Dues received primarily for the
an attachment. The income should be the
distributed by a commercial publisher; interest
organization’s support. If a member pays
gross amount derived from investments
income on loans a credit union makes to its
dues mainly to support the organization’s
reportable on line 56. Include, for example,
members; payments received by a section
activities and not to obtain benefits of more
royalty income from mineral interests owned by
501(c)(9) organization from participants, or
than nominal monetary value, those dues are a
the organization. However, do not include
employers of participants, for health and
contribution to the organization includible on
income from program-related investments. See
welfare benefits coverage; insurance premiums
line 1a.
the instructions for line 2. Also, do not include
received by a fraternal beneficiary society; and
Examples of membership benefits. These
unrealized gains and losses on investments
registration fees received in connection with a
include subscriptions to publications,
carried at market value. See the instructions for
meeting or convention.
newsletters (other than one about the
line 20.
organization’s activities only), free or
Program-related investments. Program
Lines 8a through 8d — Gains (or
reduced-rate admissions to events the
service revenue also includes income from
losses) from sale of assets other than
organization sponsors, the use of its facilities,
program-related investments. These
inventory
and discounts on articles or services that both
investments are made primarily to accomplish
members and nonmembers can buy. In figuring
Report, on lines 8a through 8c, all sales of
an exempt purpose of the investing
the value of membership benefits, do not
securities in column (A). Use column (B) to
organization rather than to produce income.
include intangible benefits, such as the right to
report sales of all other types of investments
Examples are scholarship loans and low
attend meetings, vote or hold office in the
(such as real estate, royalty interests, or
interest loans to charitable organizations,
organization, and the distinction of being a
partnership interests) and all other
indigents, or victims of a disaster.
member of the organization.
noninventory assets (such as program-related
Rental income from an exempt function is
investments and fixed assets used by the
Line 4 — Interest on savings and
another example of program-related
organization in its related and unrelated
temporary cash investments
investment income. When an organization
activities).
Enter the amount of interest income from
rents to an unaffiliated exempt organization at
On line 8a, for each column, enter the total
savings and temporary cash investments
less than fair rental value for the purpose of
gross sales price of all such assets. Total the
reportable on line 46. So-called dividends or
aiding that tenant’s exempt function, the
cost or other basis (less depreciation) and
earnings received from mutual savings banks,
reporting organization should report such rental
selling expenses and enter the result on line
money market funds, etc., are actually interest
income as program service revenue on line 2.
8b. On line 8c, enter the net gain or loss.
and should be entered on line 4.
See also the instructions for line 6a. For
On lines 8a and 8c, also report capital gains
purposes of this return, report all rental income
Line 5 — Dividends and interest from
dividends, the organization’s share of capital
from an affiliated organization on line 2.
securities
gains and losses from a partnership, and
capital gains distributions from trusts. Indicate
Unrelated trade or business activities.
Enter the amount of dividend and interest
the source on the schedule described below.
Unrelated trade or business activities (not
income from equity and debt securities (stocks
including any special events or activities) that
and bonds) of the type reportable on line 54.
Combine the gain and/or loss figures
generate fees for services may also be
Include amounts received from payments on
reported on line 8c, columns (A) and (B) and
program service activities. A social club, for
securities loans, as defined in section
report that total on line 8d. Do not include any
example, should report as program service
512(a)(5). Do not include any capital gains
unrealized gains or losses on securities carried
revenue the fees it charges both members and
dividends that are reportable on line 8. See the
at market value in the books of account. See
nonmembers for the use of its tennis courts
instructions for line 2 for reporting income from
the instructions for line 20.
and golf course.
program-related investments.
For reporting sales of securities on Form
Line 6a — Gross rents
990, you may use the more convenient
Sales of inventory items by hospitals,
average cost basis method to figure the
colleges, and universities. Books and
Enter on line 6a the rental income received for
organization’s gain or loss. When a security is
records maintained in accordance with
the year from investment property reportable
sold, compare its sales price with the average
generally accepted accounting principles for
on line 55. Do not include on line 6a rental
cost basis of the particular security to
hospitals, colleges, and universities are more
income related to the reporting organization’s
determine gain or loss. However, generally, for
specialized than books and records maintained
exempt function (program service). Report
reporting sales of securities on Form 990-T, do
according to those accounting principles for
such income on line 2. For example, an
not use the average cost basis to determine
other types of organizations that file Form 990.
exempt organization whose exempt purpose is
gain or loss.
Accordingly, hospitals, colleges, and
to provide low-rental housing to persons with
universities may report, as program service
low income would report that rental income as
Nonpublicly traded securities and
revenue on line 2, sales of inventory items
program service revenue on line 2. Rental
noninventory items. Attach a schedule
otherwise reportable on line 10a. In that event,
income received from an unaffiliated exempt
showing the sale or exchange of nonpublicly
show the applicable cost of goods sold as
organization is generally considered as
traded securities and the sale or exchange of
program service expense on line 13 of Part I
unrelated to the reporting organization’s
other assets that are not inventory items. The
and in column (B) of Part II. All other
exempt purpose and reportable on line 6a.
schedule should show security transactions
organizations, however, should not report sales
However, note an exception given in the
separately from the sale of other assets. Show
of inventory items on line 2.
instructions for line 2 when the reporting
for each of these assets:
-20-
Specific Instructions for Form 990
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