Instructions For Form 5227 (Page 3 of 12) in pdf

draw a line through the incorrect portion and enter the

E. Initial Return, Final Return, Amended

correct information.

Return; or Change of Name or Address

If you did not receive a peel-off label, complete the

Initial return. Check this box if this is the initial return for

information called for at the top of the form as it appears

the split-interest trust and enter the date that the entity

on Form SS-4, Application for Employer Identification

was created.

Number.

Final return. Check this box if this is a final return

Address

because the trust has terminated. If the trust or

beneficiary’s interest in the trust has terminated, check

Include the suite, room, or other unit number after the

the “Final K-1” box at the top of the Schedule K-1 (Form

street address. If the Post Office does not deliver mail to

1041).

the street address and the trustee has a P.O. box, show

Amended return. If you are filing an amended 2006

the box number instead.

Form 5227, check the “Amended return” box. Complete

If you receive mail for the trust in care of a third party

the entire return and correct the appropriate lines with the

(such as an accountant or an attorney), enter on the

new information. On an attachment, explain the reason

street address line “C/O” followed by the third party’s

for the changes and identify the lines and amounts being

name and street address or P.O. box.

changed.

If the amended return results in a change to income,

A. Employer Identification Number (EIN)

or a change in distribution of any income or other

Every trust that completes this return must have an

information provided to a recipient, an amended

employer identification number (EIN). You can use one of

Schedule K-1 (Form 1041) must be filed with the

the following methods to apply for an EIN.

•

amended Form 5227 and a copy given to each recipient.

Online – Click on the EIN link at

Check the “Amended K-1” box at the top of the Schedule

businesses/small. The EIN is issued immediately once

K-1 (Form 1041).

the application information is validated.

•

Change of name or address. If there has been a

By telephone at 1-800-829-4933.

•

change in the trustee’s name or address from the one

By mailing or faxing Form SS-4. You may get this form

used on the prior year’s return (including a change to an

from the IRS or the Social Security Administration. If you

“in care of” name and address), check the appropriate

are going to apply by mail, send in the Form SS-4 at least

box(es).

4 to 5 weeks before you need the number.

If the trust has not received its EIN by the time the return

If the address shown on Form 5227 changes after you

is due, write “Applied for” in the space for the EIN. For

file the form (including a change to an “in care of” name

more details, see Pub. 583, Starting a Business and

and address) file Form 8822 to notify the IRS of the

Keeping Records.

change.

Note. The online application process is not yet available

F. Unrelated Business Taxable Income

for trusts with addresses in foreign countries or Puerto

(section 664 trusts only)

Rico.

If the charitable remainder trust has any unrelated

B. Type of Entity

business taxable income (within the meaning of section

512 and related regulations) for 2006, all of the trust’s

Charitable lead trust. This is a trust that pays a fixed

income is subject to the same taxes (including estimated

annuity or unitrust amount to a charitable organization for

tax payments) that are imposed on complex trusts under

a fixed number of years. Upon termination of the

Subchapter J of the Internal Revenue Code. The trust

payments, the remainder interest is transferred to a

cannot be taxed as a grantor trust.

noncharitable beneficiary.

If you answer “Yes,” in addition to Form 5227, file

Charitable remainder annuity trust. This is a trust

Form 1041 (if a domestic trust). Use Form 1041 to report

under section 664(d)(1) that pays a fixed dollar amount

all the trust’s income (not just the unrelated business

(not less than 5% but not more than 50% of the initial net

income) and its deductions (including the deduction for

fair market value of all property placed in trust), at least

distributions to beneficiaries) and to compute any tax

annually, to one or more beneficiaries, at least one of

due. Use the regular trust rules contained in the

which is not a charitable organization, for life, or for a

Instructions for Form 1041. You must also complete

specified number of years (not to exceed 20). Upon

Schedule I of Form 1041 to determine whether the trust

termination of the payments, the remainder interest

is subject to any alternative minimum tax.

(valued at 10% or more) is transferred to a charitable

See the instructions for Part III on page 5 to determine

organization described in section 170(c), or qualified

the amount of the current distribution to report to each

employer securities are transferred to an employee stock

beneficiary on Form 1041, Schedule K-1.

ownership plan.

Part I. Ordinary Income

Charitable remainder unitrust. This is a trust under

section 664(d)(2) similar to a charitable remainder

annuity trust, except that it pays, at least annually, a fixed

Line 1. Interest Income

percentage (not less than 5% but not more than 50%) of

Report all taxable interest income that was received by

the net fair market value of the trust’s assets.

the trust. Examples of taxable interest include interest

Pooled income fund. This is a trust under section

from:

•

642(c)(5) created and maintained by a charitable

Accounts (including certificates of deposit and money

organization described in section 170(b)(1)(A)(i)-(vi).

market accounts) with banks, credit unions, and thrifts;

•

Donors to the fund receive a lifetime income interest and

Notes, loans, and mortgages;

•

the charitable organization receives the remainder

U.S. Treasury bills, notes, and bonds;

•

interest.

U.S. savings bonds;

-3-

Instructions For Form 5227 Page 3

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