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How should organizations record the payment transactions made with a controlled entity on 990-EZ?

If an organization has engaged in a transaction with a controlled entity, and if the transaction value exceeds $50,000, then they are supposed to file Form 990 instead of 990-EZ and must attach Schedule R along with the information return.

What is a Controlled Entity?

A controlled entity is an organization described under section 512(b)(13), which may be a stock or nonstock corporation, association, partnership, LLC, or trust of which the controlling organization owns more than 50% of:

  • The stock of a corporation (measured by voting power or value)
  • The profits or capital interest in a partnership
  • The beneficial interest in a trust or other entity.

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