Instructions For Form 5227 (Page 6 of 12) in pdf

No additions may be made to this class for

Column (c)

dispositions after May 5, 2003, and before 2009, but

In computing the net fair market value (FMV) of the

distributions may continue to be made from this class

unitrust’s assets, take into account all assets and

during that period.

liabilities without regard to whether particular items are

taken into account in determining the income of the trust.

Ordering Rules

The net FMV of the trust’s assets may be determined on

Ordinary income. Ordinary income is composed of two

any one date during the taxable year of the trust, or by

classes for purposes of characterizing and ordering

taking the average of valuations made on more than one

distributions: (a) qualified dividends, and (b) all other

date during the tax year of the trust, as long as the same

ordinary income. If the trust has both classes of ordinary

valuation date or dates and valuation methods are used

income, distributions are treated as made first from the all

each year. See Regulations section 1.664-3.

other ordinary income class, and second from the

qualified dividends class.

Line 25—Cash—Non-Interest-Bearing

Capital gain and loss. The following rules apply to

Enter the amount of cash on deposit in checking

accounts, deposits in transit, change funds, petty cash

undistributed long-term capital gains on assets held more

than one year.

funds, or any other non-interest-bearing account. Do not

include advances to employees or officers or refundable

If, in any tax year of the trust, the trust has both

deposits paid to suppliers or others.

undistributed short-term capital gain and undistributed

long-term capital gain, the short-term capital gain is

Line 26—Savings and Temporary Cash

deemed distributed before any long-term capital gain.

Investments

For 2004, any long-term capital gains are deemed to

Enter the total of cash in savings or other interest-bearing

be distributed in the following order:

accounts and temporary cash investments, such as

1. The 28% long-term capital gain class is deemed

money market funds, commercial paper, certificates of

distributed prior to any other class.

deposit, and U.S. Treasury bills or other governmental

2. The section 1250 long-term capital gain class is

obligations that mature in less than one year.

deemed distributed prior to the all other long-term capital

gain class and the qualified 5-year long-term capital gain

Line 27—Accounts Receivable

class.

Enter the total accounts receivable (reduced by the

3. The all other long-term capital gain class is deemed

corresponding allowance for doubtful accounts) that

distributed prior to the qualified 5-year long-term capital

arose from the sale of goods and/or the performance of

gain class.

services. Claims against vendors or refundable deposits

4. The qualified 5-year long-term capital gain class is

with suppliers or others may be reported here if not

deemed distributed last of any class.

significant in amount. (Otherwise, report them on line 36,

Other Assets.) Any receivables due from officers,

Carryover Rules

directors, trustees, foundation managers, or other

disqualified persons must be reported on line 28.

1. If the trust has capital losses in excess of capital

Receivables (including loans and advances) due from

gains for any tax year:

other employees should be reported on line 36.

a. The excess of the net short-term capital loss over

the net long-term capital gain for that year is a short-term

Line 28—Receivables Due From Officers,

capital loss carryover to the next tax year.

Directors, Trustees, and Other Disqualified

b. The excess of the net long-term capital loss over

Persons

the net short-term capital gain for that year is a long-term

capital loss carryover to the next tax year.

Enter here (and in an attached schedule described

2. If the trust has capital gains in excess of capital

below) all receivables due from officers, directors,

losses for any tax year:

trustees, and other disqualified persons and all secured

a. The excess of the net short-term capital gain over

and unsecured loans (including advances) to such

the net long-term capital loss for that year is, to the extent

persons.

not deemed distributed, a short-term capital gain

Attached Schedule

carryover to the next tax year.

b. The excess of the net long-term capital gain over

1. In the required schedule, report each loan

the net short-term capital loss for that year is, to the

separately, even if more than one loan was made to the

extent not deemed distributed, a long-term capital gain

same person, or the same terms apply to all loans made.

carryover to the next tax year.

Salary advances and other advances for personal use

and benefit, and receivables subject to special terms or

Part IV—Balance Sheet

arising from transactions not functionally related to the

trust’s charitable purposes must be reported as separate

Complete the balance sheet using the accounting

loans for each officer, director, etc.

method the trust uses in keeping its books and records.

2. Receivables that are subject to the same terms and

All filers must complete columns (a) and (b). All unitrusts

conditions (including credit limits and rate of interest) as

must also complete column (c).

receivables due from the general public and that arose in

Enter the end-of-year book value where space is

connection with an activity functionally related to the

provided to the left of column (a) to report receivables

trust’s charitable purposes may be reported as a single

and the related allowance for doubtful accounts or

total for all the officers, directors, etc. Travel advances

depreciable assets and accumulated depreciation. Enter

made in connection with official business of the trust may

the net amounts in column (b).

also be reported as a single total.

-6-

Instructions For Form 5227 Page 6

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