The formulas
- Line 6 = lines 1 to 5; public support (line 8) = line 6 - disqualified person amounts - excess receipts
- Total support (line 13) = line 6 + gross investment income + post-1975 UBTI less tax + other net UBI + other income
- Pass if public support is more than 33 1/3% and investment income (lines 10a + 10b) is not more than 33 1/3%
How it works
A section 509(a)(2) organization must normally receive more than one-third of its support from gifts, grants, contributions, membership fees and gross receipts from activities that are not an unrelated trade or business, and not more than one-third from gross investment income and net unrelated business income (less section 511 tax) from businesses acquired after June 30, 1975. Both are measured over the current and four prior tax years.
Amounts from disqualified persons are excluded from public support. Gross receipts from related activities from any one person or governmental bureau count only up to the greater of $5,000 or 1 percent of that year's total support; that limit is applied year by year, so compute line 7b with the yearly list the instructions describe and enter the total here.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Is the threshold "33 1/3 percent or more" as in Part II?
No. Part III requires more than 33 1/3 percent public support and investment income not more than 33 1/3 percent.
If we fail Part III, is that the end?
The instructions direct an organization that fails one part to try the other, Part II for section 170(b)(1)(A)(vi) status.
Sources
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.