Form 990 Schedule D Instructions: Supplemental Financial Statements (2026 Guide)
Form 990 Schedule D instructions for 2026: see who must file, what all 13 parts report, real examples, and 10 FAQs to complete your nonprofit return correctly.
Key takeaways
Schedule D reports supplemental financial details: donor advised funds, conservation easements, art collections, escrow accounts, endowments, and certain balance sheet items.
Only Form 990 filers use it. Form 990-EZ, 990-N, and 990-PF filers do not attach Schedule D (Form 990).
You complete only the parts your Part IV answers trigger, not all 13.
The IRS made Schedule D and its instructions continuous-use in December 2024, so the same revision applies for tax year 2024 and later.
What Is Form 990 Schedule D?
Schedule D (Form 990), Supplemental Financial Statements, gives the IRS and the public more detail behind the numbers on your Form 990 balance sheet and income statement. It explains assets and arrangements that the main return only summarizes.
IRS Form 990 Schedule D covers six main areas:
Donor advised funds and similar funds
Conservation easements
Collections of art, historical treasures, and similar assets
Escrow and custodial arrangements
Endowment funds
Detailed balance sheet items and a reconciliation to audited financial statements
Not to be confused with Schedule D (Form 1040). The individual Schedule D reports capital gains and losses on personal tax returns. Schedule D (Form 990) is a separate nonprofit schedule with no connection to capital gains reporting.
Who Must File Schedule D (Form 990)?
An organization must complete Schedule D if it answers “Yes” to any of Form 990, Part IV, lines 6 through 12a. Each “Yes” answer points to a specific part, so most nonprofits complete only two or three parts.
One exception applies to audits. If you answered “Yes” only on line 12b (your results appear in consolidated audited statements, not separate ones), Parts XI and XII are optional.
Use this table to match each Part IV question to the Schedule D part it triggers:
Form 990, Part IV Questions and the Schedule D Parts They Trigger
| Form 990, Part IV Line | Answer “Yes” If Your Organization… | Complete Schedule D Part |
|---|---|---|
| Line 6 | Maintains donor advised funds or similar funds | Part I |
| Line 7 | Received or held a conservation easement | Part II |
| Line 8 | Maintains collections of art or historical treasures | Part III |
| Line 9 | Holds escrow or custodial accounts, or offers credit counseling or debt services | Part IV |
| Line 10 | Holds permanent, term, or quasi-endowment funds | Part V |
| Line 11a | Reports land, buildings, or equipment on Part X, line 10 | Part VI |
| Line 11b | Holds other securities worth 5% or more of total assets | Part VII |
| Line 11c | Holds program-related investments worth 5% or more of total assets | Part VIII |
| Line 11d | Reports other assets worth 5% or more of total assets | Part IX |
| Line 11e or 11f | Reports other liabilities, or has an uncertain tax position footnote | Part X |
| Line 12a | Obtained separate, independent audited financial statements | Parts XI & XII |
Note: Part XIII has no trigger of its own. You use it to add the narrative explanations other parts require.
How to Complete Schedule D: Part-by-Part Instructions
Work through only the parts your Part IV answers trigger. Here is what each one asks for.
Part I: Donor Advised Funds
Report the number of donor advised funds you held at year-end, total contributions, total grants, and the year-end value. Column (a) covers donor advised funds; column (b) covers other funds where donors hold advisory privileges. You also confirm whether you told donors in writing that the assets are your organization's property.
Part II: Conservation Easements
List the purpose of each easement (for example, habitat protection or open space), the number of easements, and total acres. Report easements modified or released during the year, your monitoring policy, and staff hours and expenses spent on monitoring.
Part III: Collections of Art and Historical Treasures
State whether you hold collections for public exhibition, education, or research, and whether you capitalize them on your financial statements. If you capitalize them, report the related revenue and asset values.
Part IV: Escrow and Custodial Arrangements
Report money you hold as an agent, trustee, or intermediary that is not on your Form 990 balance sheet. Show beginning balance, additions, distributions, and ending balance. Credit counseling and debt management organizations explain those services here.
Part V: Endowment Funds
This part asks for a five-year roll-forward of your endowment and a split of the year-end balance by type.
Example: Your endowment starts the year at $500,000. You receive $50,000 in gifts, earn $35,000 in investment returns, pay $20,000 in scholarships, and spend $5,000 on administration. Your ending balance is $560,000. You then show what percent is board-designated, permanent, and term endowment, which must total 100%.
Part VI: Land, Buildings, and Equipment
List cost or other basis, accumulated depreciation, and net book value for land, buildings, leasehold improvements, equipment, and other assets. The total must match Form 990, Part X, line 10c.
Parts VII, VIII, and IX: Securities, Program-Related Investments, and Other Assets
These parts apply only when the category equals 5% or more of total assets on Part X, line 16.
Example: Your total assets are $2,000,000 and you hold $150,000 in closely held stock. That is 7.5% of total assets, so you must complete Part VII. A $60,000 holding (3%) would not trigger it.
Part X: Other Liabilities
Describe each liability not shown elsewhere on Part X, such as deferred revenue or amounts due to related parties. If your audited statements include an uncertain tax position footnote (ASC 740), copy its text into Part XIII.
Parts XI and XII: Reconciling Audited Statements to Form 990
These parts explain why the revenue and expenses on your audited statements differ from Form 990. The difference usually comes from items GAAP counts but Form 990 excludes.
Example: Your audit shows $1,250,000 in revenue. That includes $40,000 in net unrealized investment gains and $25,000 in donated services, which Form 990 excludes from revenue. You subtract both, so Form 990, Part I, line 12 shows $1,185,000.
Part XIII: Supplemental Information
Use Part XIII for the narratives other parts require, such as your endowment's intended uses or your easement accounting policy. Label each entry with its part and line number.
Common Schedule D Mistakes to Avoid
Leaving out a required part. A “Yes” on Part IV with no matching Schedule D part makes your return incomplete.
Totals that don't tie to Part X. Parts VI through X must match the balance sheet line they support.
Skipping the 5% test. Calculate each investment category against total assets before deciding Parts VII to IX don't apply.
Forgetting the Part XIII narratives. Endowment uses, easement policies, and the ASC 740 footnote all belong there.
Mixing up Schedule D (Form 990) and Schedule D (Form 1040). Tax software search results often blend the two.
Forgetting it's public. Unlike donor names on Schedule B, Schedule D is open to public inspection, so check it as donors would read it.
Get Help Filing Schedule D
Schedule D is one of the most detailed Form 990 schedules, and one unreconciled number can delay your return. Form990Series prepares your complete Form 990, including every required schedule, at a flat rate with enrolled agent review. Get started today and file accurately before your deadline.
Frequently Asked Questions
1. What is Form 990 Schedule D used for?
Schedule D reports supplemental financial information for Form 990 filers. It covers donor advised funds, conservation easements, art collections, escrow accounts, endowments, detailed balance sheet items, and the reconciliation of audited statements to the return.
2. Who must file Schedule D with Form 990?
Any organization that answers “Yes” to Form 990, Part IV, lines 6 through 12a must complete the matching parts of Schedule D and attach it.
3. Do Form 990-EZ filers need to complete Schedule D?
No. Schedule D (Form 990) attaches only to the full Form 990. Form 990-EZ, 990-N, and 990-PF filers do not use it.
4. Do I have to complete all 13 parts of Schedule D?
No. You complete only the parts triggered by your Part IV answers. Most organizations complete two or three parts.
5. When are Schedule D Parts XI and XII required?
They are required when you answer “Yes” to Part IV, line 12a, meaning you received separate, independent audited financial statements. If you appear only in consolidated audited statements (line 12b), these parts are optional.
6. How does the 5% of total assets test work on Schedule D?
Divide the value of a category (other securities, program-related investments, or other assets) by total assets on Part X, line 16. If the result is 5% or more, complete the matching part.
7. How do I report endowment funds on Schedule D?
Use Part V. Show a five-year roll-forward of beginning balance, contributions, investment returns, grants, expenses, and ending balance, then split the year-end total among board-designated, permanent, and term endowments.
8. How are donor advised funds reported on Schedule D?
Use Part I. Report the number of funds, total contributions, total grants, and year-end value, and confirm your written donor notices and grant policies.
9. Is Schedule D (Form 990) available to the public?
Yes. Schedule D is part of your public Form 990, so anyone can view it through the IRS, your organization, or databases such as ProPublica.
10. Is Form 990 Schedule D the same as Schedule D (Form 1040)?
No. Schedule D (Form 1040) reports capital gains and losses for individuals. Schedule D (Form 990) reports supplemental financial statements for tax-exempt organizations.
