Instructions For Form 5227 (Page 8 of 12) in pdf

Short tax years. To figure the annuity amount (line 48b)

Line 41—Mortgages and Other Notes

or the unitrust amount (line 52) for short tax years,

Payable

multiply the annuity or unitrust amount by the number of

Enter the amount of mortgages and other notes payable

days in the trust’s tax year, and then divide the result by

at the beginning and end of the year. Attach a schedule

365 (or 366 for leap years).

showing, as of the end of the year, the total amount of all

For a unitrust whose governing instrument provides for

mortgages payable and, for each nonmortgage note

an income exception, if no valuation date occurs before

payable, the name of the lender and the other information

the end of the trust’s tax year, value the trust’s assets as

specified in the line 28 instructions. The schedule should

of the last day of the trust’s tax year.

also identify the relationship of the lender to any officer,

director, trustee, or other disqualified person.

Part VI-A and B—Statements

Line 42—Other Liabilities

Regarding Activities

List and show the amount of each liability not reportable

Answer every question in these sections. If a line does

on lines 38 through 41. Attach a separate schedule if

not apply, enter “N/A.”

more space is needed.

Both annuity trusts and unitrusts should include any

Part VI-A

advances from trustees on line 42. Unitrusts should also

include any unitrust amounts applicable to prior periods

Line 1

that are unpaid as of the valuation date, since such

A split-interest trust must have a governing instrument

amounts reduce the net FMV of the trust’s assets.

that requires the trust to act or refrain from acting so as

Line 43—Total Liabilities

not to engage in an act of self-dealing under section 4941

or subject it to the excise taxes under section 4943,

Columns (a) and (b) (and column (c) if a unitrust) must

4944, or 4945. The trust may satisfy the requirements

always have an entry, even if it is zero.

either by express language in its governing instrument or

Line 47—Total Liabilities and Net Assets

by the operation of state law which imposes the above

requirements on the trust or treats these requirements as

Columns (a) and (b) (and column (c) if a unitrust) must

being contained in the governing instrument. If a trust

always have an entry, even if it is zero.

claims it satisfies the requirements of section 508(e) by

Part V-A and B—Charitable

operation of state law, the provisions of state law must

effectively impose the requirements of section 508(e) on

Remainder Trust Information

the trust.

If, however, the state law does not apply to a

Line 49a

governing instrument which contains mandatory

Enter the unitrust fixed percentage (which may not be

directions conflicting with any of its requirements and the

less than 5% or more than 50%).

trust has such mandatory directions in its governing

If there is more than one unitrust recipient, attach a

instrument, then the trust has not satisfied the

schedule showing the percentage of the total unitrust

requirements of section 508(e) by the operation of that

dollar amount payable to each recipient. The sum of

state law.

these individual shares should be 100%.

Part VI-B

Line 49b

Complete Part VI-B to determine whether the trust has

This line must always have an entry, even if it is zero.

complied with the applicable Chapter 42 rules relating to

Line 50a

private foundations and whether the trust, trustee,

disqualified persons, or some combination of these, may

Enter the trust’s 2004 accounting income determined

be liable for foundation excise taxes. These excise taxes

under the terms of the governing instrument and

include:

applicable local law. Do not include extraordinary

•

The section 4941 tax on self-dealing between the trust

dividends or taxable stock dividends that are determined

and “disqualified persons,”

under the governing instrument and applicable local law

•

The section 4943 tax on excess business holdings,

to be allocable to corpus.

•

The section 4944 tax on investments that jeopardize

Line 51a

the trust’s charitable purposes, and

•

The section 4945 tax on taxable expenditures.

Figure the total accrued distribution deficiencies from

previous years as follows.

The split-interest trust pays these taxes on Form 4720.

For a detailed explanation of each of these taxes, see the

1. Aggregate the unitrust’s net asset FMV for each

Instructions for Form 4720.

previous year.

2. Multiply 1 above by the unitrust’s fixed percentage.

The excise taxes on private foundations do not apply

3. From the result in 2, subtract the aggregate trust

to any amounts:

income that was distributed for previous years.

1. Payable under the terms of the trust to income

beneficiaries, unless a deduction was allowed under

Line 52

section 170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B);

2. In trust for which a charitable contribution deduction

Enter the total 2004 unitrust distributions reported in Part

was not allowed under any provision of the Code, if the

III.

amounts are segregated (as defined in section

Line 53

4947(a)(3)) from amounts for which a deduction was

Use this amount to determine future accrued distribution

allowable; or

deficiencies.

3. Transferred in trust before May 27, 1969.

-8-

Instructions For Form 5227 Page 8

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