Form 990-T / Unrelated business income

Hello, JRG26.

I'm here to share and help you with the report you need for your Form 990-T in QuickBooks Desktop (QBDT).

Indeed, you are correct! To verify the accuracy of your data, you can utilize the Profit and Loss (P&L) and Balance Sheet Standard reports. The Balance Sheet report displays the net income for the current fiscal year, which should align with the net income shown on the P&L report for the same fiscal year. However, please note that you will need to generate each report manually to compare and determine if the displayed data is accurate or not.

If they have different net income, please refer to this article for the recommended solution to fix this: Net Income on the Balance Sheet report does not match the Net Income on the Profit and Loss report.

Additionally, filing Form 990 is currently unsupported in QBDT. If you think your organization/company qualifies to file it, I recommend working with an accountant or financial advisor to get more details about it.

I'm also adding this article that tackles customizing reports in QBDT for future reference: Customize reports in QuickBooks Desktop.

Please leave a comment below if you have additional questions about this or anything else. I'm more than willing to assist. Take care.

@JRG26 

Form 990-T is for reporting unrelated income which is income from IRAs, HSAs, etc.  This is different than just your net income on your P&L.  If your P&L shows negative net income, you may still have >= $1,000 of unrelated taxable income (the threshold to file Form 990-T).  Unrelated income should be recorded in your books as 'Other income'.  That way, you can differentiate it from the income generated from your primary operations.   

Rainflurry, thank you!

This is exactly the information I was looking for.  One more question, if you don't mind?  I know how to set up Other Income as Unrelated Business Income, but what I don't know is, what type of income actually goes into the account?  The client owns a Mobile Home Park and collects rent.  Is that unrelated business income?  I've heard yes & no.

@JRG26 

If your client owns a mobile home park, is rent not the main source of income?  That certainly sounds like income from their primary operation.  I'm not sure if you were referring to a different client when referencing Form 990-T, but 990-T only applies to not-for-profit organizations.    

Rainflurry,

Yes, same client.  The mobile home park is the only income for the property.  Rent is collected for the lot spaces along several homes.

The mobile home park was purchased from 401(k) funds and is paid in full.

So, is the unrelated business income that's to be reported, what funds are in the client's account at Equity Trust?  I have read both "Rental Income is non-business income" or "Rents received by an individual in real estate are business income"

I'm not sure yet where I get the unrelated business taxable income, for the 990-T?

Thank you for helping!

@JRG26 

Just to confirm, the mobile home park is a non-profit?  That sounds strange given that it was purchased with 401(k) funds.  The 990-T only applies to non-profit organizations which would make sense if your client is the homeowners association, but not an individual. 

No, the MHP is not non-profit.  I think I've figured out what to submit though.  Thank you for your help, it is appreciated.  I learned some things from you!

Hi JRG26!

It's wonderful to see the positive interactions between you and Rainflurry. I'm happy to hear that you're making progress and finding the information you need through your exchanges. Rainflurry has proven to be a valuable resource to the QuickBooks Community, providing helpful assistance.

Remember, if you have any other concerns regarding QuickBooks, don't hesitate to return to this thread. We're here to provide ongoing support. Additionally, other users can also share their expertise, particularly in areas related to taxes or accounting. Together, we can ensure you receive the assistance you need.

So what did you find out? I have a similar situation. A non profit owns a rents out its facility to the public for an income. What did you find out about how to disclose this UBIT?

Thanks!

Hi,

I used only the 990-T to report the unrelated business income.  My business is a mobile home park.  Make sure that you have your purchase of property/business under accumulated depreciation, then you may or not have a negative number.  Yes, use your P&L, and make sure your Balance Sheet has the same net.

I didn't use any of the other forms, that could be related.  They may apply to your business and they may not. You can also find the other 990- forms on the IRS website, along with the instructions.  The instructions are very detailed, but you can figure out what is reportable and what isn't for your business.

The 990-T form is explained well, and fairly easy to follow.  This was the first time I did it, and I'm not a tax person, so if I can do it, so can you!

The hard part for me was finding where to electronically file the 990-T form on the IRS website.  If you figure out how to do that, please let me know.

Hope this helps!  Have a good week!

JRG26