Does my organization have to report financial transactions with joint ventures while filing form 990?
143 views | Last modified 4/8/2024 6:15:08 AM EST |

Applicable To
990-PF 990-N 990-EZ 990 8868 1120-POL

Yes, if your organization has invested in, contributed assets to, or participated in a joint venture or any other similar arrangement for the tax year, then it must state them while filing Form 990.

However, to state these transactions, the venture or the similar arrangements must meet the following conditions.

  1. 95% or more of the venture's or arrangement's income for the tax year ending with or within the organization's tax year must be described under section 512(b)(1)–(5)(including unrelated debt-financed income).
  2. The primary purpose of the organization's contribution, investment, or participation with the venture or arrangement must be focused upon the production of income or the appreciation of property.

Reporting Transactions made with a joint venture with Tax 990’s Interview-based Filing Style.

  1. Log into your Tax 990 account.
  2. On the dashboard, click on the "Start New Return" button.
  3. Select the "Tax Year" and "Form 990" options on the list of Federal Return.
  4. Enter your organization details and click "Next."
  5. On the "Organization Tax Year" page, select the tax year calendar or fiscal, for which you want to file the information return. Once done, the subsequent steps will be to fill the actual parts of the form.
  6. Under the Governance, Management, and Disclosure section, click "Start" in Written Policy.
  7. Select "Yes" for the conditions stated under transaction with a joint venture or other arrangements.
  8. Click Next and follow the subsequent steps as prompted.
  9. Review the details, Pay, and click the Transmit button to transmit your return to the IRS.

Reporting transactions made with a joint venture with Tax 990’s form-based filing style

To report transactions made with a joint venture using our form-based filing style, please go to Part VI, Section B. Policies.

In line 16a, select “Yes” for the question, “Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year?”.

The organization must also select “Yes” in line 16b if it had

  1. Followed a written policy or procedure stating that its transactions made with the venture or other arrangements are safeguarded to ensure that the organization's exempt status is protected, and
  2. Taken the required steps to safeguard its exempt status for the venture or arrangement.

However, If the organization didn’t perform the activities mentioned above, it must check “No” in line 16b of Part VI, Section B. Policies.

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