Once you’ve identified any related organizations you have, you then need to report any transactions between your organization, and its related organizations. You’ll report these transactions in Part V of Schedule R, except for transactions with a related organization that is a disregarded entity and reported in Part I.
Line 1 of Part V lists 19 types of transactions; check yes or no to report whether you engaged in each type of transaction with a related organization. Note that a single transaction might be reported on multiple lines. On lines 1r and 1s, a transfer is any movement of funds or property that isn’t described in lines 1a through 1q, whether or not consideration was exchanged in return, e.g. a merger with a related organization.
In the grid in line 2, report the details of the transactions you indicated on line 1. Include all transactions described in line 1a – receipts or accruals of interest, annuities, royalties, or rent from a controlled entity, regardless of the dollar amount. For each type of transaction described on lines 1b through 1s, total the amounts involved between your organization and each controlled entity. Report each type of transaction for which you had $50,000 or more with a particular controlled entity during the fiscal year you’re reporting on your Form 990. Also include transactions with tax-exempt organizations who are not exempt under section 501(c)(3), e.g. section 527 political organizations, if the transactions meet the same $50,000 threshold. If you had multiple types of transactions with a specific related organization, list each type of transaction on a separate line. Multiple transactions of the same type, with the same organization, can be consolidated into a single line.
In columns (a) and (b), enter the legal name of the related organization and the type of transaction (a-s, depending on which line described the transaction in 1a through 1s). In column (c), enter the fair market value of the services, cash, and/or other assets that you provided during your fiscal year, or the fair market value of what you received, whichever is higher. Report a transaction even if it was entered into during a prior year. In column (d), described the method you used to value the services, cash, and other assets you listed in column (c).
Schedule R can be found here, and more detailed instructions for filling it out are provided here. I covered Parts I-IV in a previous post and will cover Part VI in a future post.