Instructions For Form 5227 printable pdf download

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Department of the Treasury

Internal Revenue Service

Instructions for Form 5227

Split-Interest Trust Information Return

Section references are to the Internal Revenue Code unless otherwise noted.

Note: Regulations section 1.6012-3(a)(6) references

What’s New

Form 1041-B. Form 5227 replaces Form 1041-B.

•

We have deleted last year’s line 17c for qualified

Definitions

5-year gain and renumbered last year’s line 17d for

unrecaptured section 1250 gain as line 17c.

•

Split-interest trust. A split-interest trust is a trust that:

The ordering and netting rules for long-term capital

•

Is not exempt from tax under section 501(a);

gains have changed to reflect the removal of the

•

Has some unexpired interests that are devoted to

transition year rules for 2003. See page 5 for more

purposes other than religious, charitable, or similar

information.

purposes described in section 170(c)(2)(B); and

•

Photographs of Missing Children

Has amounts transferred in trust after May 26, 1969,

for which a deduction was allowed under one of the Code

The Internal Revenue Service is a proud partner with the

sections listed in section 4947(a)(2).

National Center for Missing and Exploited Children.

Photographs of missing children selected by the Center

A split-interest trust is subject to many of the same

may appear in instructions on pages that would otherwise

requirements and restrictions that are imposed on private

be blank. You can help bring these children home by

foundations.

looking at the photographs and calling 1-800-THE-LOST

(1-800-843-5678) if you recognize a child.

Recipient. A recipient is a beneficiary who receives the

possession or beneficial enjoyment of the unitrust or

annuity amount.

General Instructions

Foundation manager. A foundation manager is an

officer, director, or trustee (or an individual who has

Purpose of Form

powers or responsibilities similar to those of officers,

Use Form 5227 to report the financial activities of a

directors, or trustees). In the case of any act or failure to

split-interest trust described in section 4947(a)(2); and to

act, the term foundation manager may also include an

determine whether the trust is treated as a private

employee of the trust who has the authority to act.

foundation and is subject to the excise taxes under

Disqualified person. A disqualified person is:

Chapter 42.

1. A substantial contributor;

A charitable remainder annuity trust or unitrust is

2. A foundation manager;

exempt from federal income tax for any tax year if it:

•

Was created after July 31, 1969, and

3. A person who owns more than 20% of a

•

Has no unrelated business taxable income for the tax

corporation, partnership, trust, or unincorporated

year.

enterprise, which is itself a substantial contributor;

4. A member of the family of an individual in the first

Even though the trust is exempt from federal income

three categories; or

tax, it must file Form 5227 each year.

5. A corporation, partnership, trust, or estate in which

Who Must File

persons described in 1, 2, 3, or 4 above own a total

beneficial interest of more than 35%.

All charitable remainder trusts described in section 664,

6. For purposes of section 4943 (excess business

pooled income funds described in section 642(c)(5), and

holdings), a disqualified person also includes:

charitable lead trusts (see Exception below) must file

Form 5227.

a. A private foundation which is effectively controlled

(directly or indirectly) by the same persons who control

Exception. Generally, a split-interest trust created

the trust in question, or

before May 27, 1969, is not required to file Form 5227.

However, if any amounts were transferred to the trust

b. A private foundation substantially all of the

after May 26, 1969, for which a deduction was allowed

contributions to which were made (directly or indirectly)

under any of the sections listed under section 4947(a)(2),

by the same person or persons described in 1, 2, or 3

Form 5227 must be filed for the year of the transfer and

above, or members of their families, within the meaning

all subsequent years regardless of whether additional

of section 4946(d), who made (directly or indirectly)

transfers are made in subsequent years.

substantially all of the contributions to the trust in

question.

Charitable lead trusts and charitable remainder trusts

7. For purposes of section 4941 (self-dealing), a

whose charitable interests involve only war veterans’

disqualified person also includes certain government

posts or cemeteries described in sections 170(c)(3) and

officials. (See section 4946(c) and the related

170(c)(5), respectively, are not required to complete

regulations.)

Parts VI and VII of Form 5227.

Cat. No. 13228E

Instructions For Form 5227

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