IRS Posts 2025 Draft Form 990-T Instructions

The Internal Revenue Service (IRS) has posted 2025 draft tax year Instructions for Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e)). Form 990-T is used to report unrelated business income and is sometimes used when an individual retirement arrangement (IRA) generates revenue from holding an investment, or an interest in an investment, apart from the value of the asset itself. For example, ownership of a retail business would likely generate revenue from ongoing sales of that business’s products or services. That revenue would be considered unrelated business taxable income (UBTI). 

Unlike dividends or appreciated market value or interest, which generally grow tax-deferred in an IRA, UBTI is taxed on a current-year basis. Form 990-T is filed to report and pay UBTI tax. The 2025 tax year Form 990-T was released last week.