IRS makes Form 990 Schedule K-1 reporting of joint ventures and partnership investments optional for 2011 tax year

Exempt Organizations Tax Services Update

In documentation posted to its website on March 22, 2012, the Internal Revenue Service announced that the new Form 990 requirement for Schedule K-1 reporting of information on joint ventures and other partnerships will be optional for 2011.

This initial requirement to report income, expenses, and balance sheet items related to partnership investments on the 2011 Form 990 based on Schedule K-1 information was introduced in the 2011 Form 990 and Instructions released by the IRS on January 21, 2012. Historically, partnership information on the Form 990 was reported consistently with all other financial data based on an organization's books and records.

This dramatic shift in reporting of partnership information likely would have resulted in multiple inconsistencies throughout the Form 990 financial data and would have created significant burden for many organizations, particularly those who receive a large number of Schedules K-1 related to their partnership investments.



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