Parts VI through X of Schedule D cover various balance sheet-related items that are similar enough that I can cover them all together.

On Part VI, describe land, buildings, and equipment reported on line 10 of Part X of your Form 990. In column (a) and (b), put the total cost or other basis of each category – land, buildings, leasehold improvements, equipment, and other fixed assets. Column (a) is for fixed assets held for investments, e.g. rental properties, and column (b) is for assets held for other reasons, e.g. for carrying out your exempt activities. In columns (c) and (d), put the accumulated depreciation and net book value. The total of columns (a) and (b) should tie out to line 10a on Part X of your 990. The totals of columns (c) and (d) should respectively tie out to lines 10b and 10c on Part X.

Part VII details the amount reported on Form 990, Part X, line 12 – investments that are not publicly traded securities, and are not program-related investments (reported on Part X, line 13). Part VII needs to be filled out if Part X, line 12 is 5% or more of your total assets. These securities could take the form of:

  • Stock in closely held companies that isn’t available for sale to the general public or widely traded
  • Publicly traded stock of which you own 5% or more of the outstanding shares of the same class
  • Publicly traded stock in a corporation that’s 5% or more of your total assets

In Part VII, describe each type of investment in column (a), the book value in column (b), and the method of valuation in column (c). Column (c) will either be the cost or end-of-year market value. If you own stock in a publicly-traded corporation that meets either of the 5% ownership tests, list them separately, and include the number of shares you own in column (a).

Fill out Part VIII if you have program-related investments that are 5% or more of your total assets (Form 990, Part X, line 13). Investments are program-related if you make them for the sake of accomplishing your tax-exempt purpose, instead of for producing income. This may include, among other things, loans or notes receivable you made to other exempt organizations so they can help you accomplish your exempt purpose. In column (a), describe the type of investment. Each investment needs to be a on a separate line. In column (b), list the book value of each investment. The total should tie out to Form 990, Part X, line 13. In column (c), put the valuation method you use for the investments – cost or end-of-year market value.

Part IX is for Other Assets (Form 990, Part X, line 15) and you need to fill it out if the Other Assets listed are 5% or more of your total assets. Describe the assets in column (a), using any reasonable basis to classify them. Put the book value in column (b); the total should tie out to Form 990, Part X, line 15).

2 things could trigger you needing to fill out Schedule D, Part X:

  • You list an amount under Other Liabilities (Form 990, Part X, line 25)
  • Your financial statements have a footnote about your liability for uncertain tax positions

If you have Other Liabilities, describe each type of liability in line 1, column (a). You can use any reasonable basis to classify them. If you have any liabilities for federal income taxes or owe anything to related organizations, each of these liabilities need to be broken out. In column (b), list the book value of each liability. The total should tie out to Form 990, Part X, line 25.

If you have a footnote in your financial statements about your liability for uncertain tax positions, check the box on line 2 and put the text of the footnote in Part XIII. Depending on which country you issue financial statements in, this footnote may be required under US GAAP FIN 48/ASC740, International Financial Reporting Standards, or country-specific accounting standards. Report the footnote in Part XIII even if you don’t report a liability for uncertain tax positions. Include verbatim any part of the footnote that only addresses your liability. You can summarize any part(s) of the footnote that reports a liability for multiple organizations including yours (e.g. a group with consolidated financial statements). In the latter case, include what your share of the liability is.

Schedule D can be found here, and more detailed instructions for filling it out are provided here. I am covering other parts of Schedule D in additional blog posts. (Part I | Part II | Part III | Part V | Parts XI – XII)