New Form 990 has a few significant changes for 2011

BY SALLY P. SCHREIBER

The IRS posted the final 2011 Form 990, Return of Organization Exempt From Income Tax, and instructions on its website. Form 990 has become more and more complex as the role of nonprofit organizations has evolved in the United States. The latest version of the form contains a few significant changes, among them the requirement that an organization must complete Form 990, Part I of Schedule F, Statement of Activities Outside the United States, if it had foreign investments during the tax year valued at $100,000 or more. Previously, Part I of Schedule F needed to be completed only if the organization had aggregate revenues or expenses of more than $10,000 attributable to various foreign activities.

Another big change is the new requirement that an organization complete Part X, “Balance Sheet,” by reporting its distributive share of assets in any joint ventures and other entities treated as partnerships for federal tax purposes according to the ending capital account in the partnership reported on Schedule K-1. 

Other changes/clarifications listed by the IRS include: (1) Contributions of conservation easements and other qualified conservation contributions must be reported consistently with how the organization reports revenue from such contributions in its books, records and financial statements, and (2) the organization’s distributive share of investment income, royalties and rental income from joint ventures should be reported on specific lines of Part VIII, “Statement of Revenue.”

The Form 990 instructions contain several changes to the Form 990 Glossary, including revising the definition of “grants and other assistance” to exclude certain payments by voluntary employees’ beneficiary associations. And a final area of interest is an amendment to Appendix K, Contributions, clarifying that a donor’s phone bill for a text message meets the Sec. 170(f)(17) requirement of a reliable written record if it shows the donee organization’s name and the date and amount of the contribution.

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

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