Instructions For Form 990 And Form 990-Ez - 2003 Page 38
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461. However, for the optional reporting of such
benefited that government agency directly
4. Other investment income. Include, for
amounts, see the instruction for donated
rather than benefiting the public as a whole.
example, royalty income from mineral interests
services in Part III.
See line 1, instruction A8, for reporting
owned by the organization.
guidelines when payments are received from a
Any unreimbursed expenses of officers,
B. What is not included on line 4
government agency for providing a service,
employees, or volunteers do not belong on the
facility, or product for the primary benefit of the
1. Capital gains dividends and unrealized
Form 990 or Form 990-EZ. See the instructions
general public.
gains and losses. Do not include on this line
for charitable contributions and employee
any capital gains dividends. They are reported
business expenses in Pub. 526 and 463,
Line 3 — Membership Dues and
on line 5. Also do not include unrealized gains
respectively.
Assessments
and losses on investments carried at market
3. Section 501(c)(9), (17), and (18)
Enter members’ and affiliates’ dues and
value. See the instructions for line 20.
organizations. These organizations provide
assessments that are not contributions. See
2. Exempt function revenue (program
participants with life, sickness, accident,
also General Instruction L.
service). Do not include on line 4 amounts
welfare and unemployment insurance,
that represent income from an exempt function
A. What is included on line 3
pension(s), or similar benefits, or a
(program service). Report these amounts on
combination of these benefits. When such an
1. Dues and assessments received that
line 2 as program service revenue. Report
organization receives payments from
compare reasonably with the benefits of
expenses related to this income on lines 12
participants, or their employers, to provide
membership. When the organization receives
through 16.
these benefits, report the payments on line 2
dues and assessments that compare
An organization whose exempt purpose is
as program service revenue, rather than on
reasonably with membership benefits, report
to provide low-rental housing to persons with
line 1 as contributions.
such dues and assessments on line 3.
low income receives exempt function income
C. How to value noncash contributions
from such rentals. An organization receives
2. Organizations that generally match dues
See General Instruction L and Schedule B
exempt function income if it rents or sublets
and benefits. Organizations described in
(Form 990, 990-EZ, or 990-PF).
rental space to a tenant whose activities are
section 501(c)(5), (6), or (7) generally provide
related to the reporting organization’s exempt
benefits with a reasonable relationship to dues,
D. Schedule of contributors
purpose. Exempt function income also arises
although benefits to members may be indirect.
Attach Schedule B (Form 990, 990-EZ, or
when an organization rents to an unaffiliated
B. Examples of membership benefits
990-PF). See General Instruction L and the
exempt organization at less than fair rental
Specific Instructions for Completing the
These include subscriptions to publications;
value for the purpose of helping that
Heading of Form 990-EZ, Item H.
newsletters (other than one about the
unaffiliated organization carry out its exempt
organization’s activities only); free or
purpose. Report rental income received in
Line 2 — Program Service Revenue
reduced-rate admissions to events the
these instances on line 2 and not on line 4.
Including Medicare, Medicaid
organization sponsors; use of its facilities; and
Only for purposes of completing this return,
Payments, and Government Fees and
discounts on articles or services that both
treat income from renting property to affiliated
Contracts
members and nonmembers can buy. In figuring
exempt organizations as exempt function
the value of membership benefits, disregard
Enter the total program service revenue
income and include such income on line 2 as
such intangible benefits as the right to attend
(exempt function income). Program services
program service revenue.
meetings, vote, or hold office in the
are primarily those that form the basis of an
Lines 5a – c — Gains (or Losses) From
organization, and the distinction of being a
organization’s exemption from tax.
Sale of Assets Other Than Inventory
member of the organization.
1. Examples. A clinic would include on line 2
all of its charges for medical services (whether
C. What is not included on line 3
A. What is included on line 5
to be paid directly by the patients or through
1. Dues or assessments received that
Medicare, Medicaid, or other third-party
Report on line 5a all sales of securities and
exceed the value of available membership
reimbursement), laboratory fees, and related
sales of all other types of investments (such as
benefits. Whether or not membership benefits
charges for services.
real estate, royalty interests, or partnership
are used, dues received by an organization, to
interests) as well as sales of all other
Program service revenue also includes
the extent they exceed the monetary value of
noninventory assets (such as program-related
tuition received by a school; revenue from
the membership benefits available to the dues
investments and fixed assets used by the
admissions to a concert or other performing
payer, are a contribution that should be
organization in its related and unrelated
arts event or to a museum; royalties received
reported on line 1.
activities).
as author of an educational publication
2. Dues received primarily for the
Total the cost or other basis (less
distributed by a commercial publisher;
organization’s support. If a member pays
depreciation) and selling expenses and enter
payments received by a section 501(c)(9)
dues primarily to support the organization’s
the result on line 5b. On line 5c, enter the net
organization from participants or employers of
activities, and not to obtain benefits of more
gain or loss. Report capital gains dividends, the
participants for health and welfare benefits
than nominal monetary value, those dues are a
organization’s share of capital gains and losses
coverage; and registration fees received in
contribution to the organization includible on
from a partnership, and capital gains
connection with a meeting or convention.
line 1.
distributions from trusts on lines 5a and 5c.
2. Program-related investment income.
Indicate the source on the schedule described
Program service revenue also includes income
Line 4 — Investment Income
below.
from program-related investments. These
For this return, you may use the more
investments are made primarily to accomplish
A. What is included on line 4
convenient way to figure the organization’s
an exempt purpose of the investing
1. Interest on savings and temporary cash
gain or loss from sales of securities by
organization rather than to produce income.
investments. Include the amount of interest
comparing the sales price with the
Examples are scholarship loans and
received from interest-bearing checking
average-cost basis of the particular security
low-interest loans to charitable organizations,
accounts, savings, and temporary cash
sold. However, generally, the average-cost
indigents, or victims of a disaster. Rental
investments, such as money market funds,
basis is not used to figure the gain or loss from
income received from an exempt function is
commercial paper, certificates of deposit, and
sales of securities reportable on Form 990-T.
another example of program-related
U.S. Treasury bills or other governmental
investment income. See also the instructions
B. What is not included on line 5
obligations that mature in less than 1 year.
for line 4.
Do not include on line 5 any unrealized gains
So-called dividends or earnings received from
3. Unrelated trade or business activities.
or losses on securities that are carried in the
mutual savings banks, money market funds,
Unrelated trade or business activities (not
books of account at market value. See the
etc., are actually interest and should be
including any special events or activities) that
instructions for line 20.
included on this line.
generate fees for services may also be
C. Attached schedule
2. Dividends and interest from securities.
program service activities. A social club, for
example, should report as program service
Include the amount of dividend and interest
1. Nonpublicly traded securities and
income from equity and debt securities (stocks
revenue the fees it charges both members and
noninventory items. Attach a schedule to
and bonds) on this line. Include amounts
nonmembers for the use of its tennis courts
show the sale or exchange of nonpublicly
and golf course.
received from payments on securities loans, as
traded securities and the sale or exchange of
defined in section 512(a)(5).
4. Government fees and contracts. Program
other assets that are not inventory items. The
service revenue includes income earned by the
3. Gross rents. Include gross rental income
schedule should show security transactions
organization for providing a government
received during the year from investment
separately from the sale of other assets. Show
agency with a service, facility, or product that
property.
for these assets:
-38-
Specific Instructions for Form 990-EZ
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