Form 990 Schedule N Filing Instructions
Liquidation, Termination, Dissolution, or Significant Disposition of Assets
Schedule N for Form 990/990-EZ - Liquidation, Termination, Dissolution, or Significant Disposition of Assets
- Updated August 14, 2023 - 2.00 PM - Admin, Tax990
Organizations that file Form 990 or 990-EZ may be required to attach Schedule N to report additional information regarding the status of their operations.
Here, you can gather more information regarding the purpose, filing requirements, and instructions for completing Schedule N.
Table of Contents
What is the Purpose of Form 990/990-EZ Schedule N?
Schedule N is used by organizations to report going out of existence or disposing of more than 25% of its net assets through sale, exchange, or other disposition during the corresponding tax year.
Who Must File Form 990/990-EZ Schedule N?
Organizations that entered “Yes” on the following lines must attach Schedule N
- Form 990, Part IV, lines 32 or 33 (or)
- Form 990-EZ, Part V, line 36
This includes
- Organizations that liquidated, terminated, or dissolved and ceased their operations during the
tax year. - Organizations that sold, exchanged, disposed of, or transferred more than 25% of their net assets during the tax year.
How to Complete Form 990/990-EZ Schedule N?
Schedule N consists of 3 parts in total. Organizations are required to complete the applicable parts based on the answers provided on their Form 990 or Form 990-EZ.
Part I - Liquidation, Termination, or Dissolution
This part needs to be completed by organizations that answered “Yes” on Form 990, Part IV, line 31, (or) Form 990-EZ, Part V, line 36.
There will be a tabular column in which you can enter required details about the assets that were transferred in the liquidation, termination, or dissolution. The required details include
a.
Description of asset(s) distributed or transaction expenses paid
b.
Date of distribution
c.
Fair market value of the asset(s) distributed or amount of transaction expenses
d.
Method of determining FMV for the asset(s) distributed or transaction expenses
e.
EIN of recipient
f.
Name and address of recipient
g.
IRC section of the recipient(s) (if tax-exempt) or type of entity
Next, you will answer a series of “Yes” or “No” questions. The questions are primarily about
- How your organization’s officer, director, trustee, or key employee is related to the transferee organization (Eg: director, employee, etc.)
- Whether the distribution of assets has occurred in accordance with governing instruments
- Whether the organization has paid all its liabilities in accordance with state laws
- Whether the organization has any outstanding tax-exempt bonds
Part II - Sale, Exchange, Disposition, or Other Transfer of More Than 25% of the Organization’s Assets
This part must be completed by organizations that answered “Yes” on Form 990, Part IV, line 32, (or) Form 990-EZ, Part V, line 36.
Report details regarding the significant disposition of your organization’s net assets (more than 25% of its FMV), including the sale, exchange, disposition, or other transfers during the corresponding tax year.
Similar to the previous part, include a description and other details regarding the assets or transactions in the tabular column provided.
Part III - Supplemental Information
Part III requires an explanation for answers provided in the previous part. You can also provide additional information for any other questions from the previous parts here.
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