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

other ordinary income class, and second from the

Line 25. Cash—Non-Interest-Bearing

qualified dividends class.

Enter the amount of cash on deposit in checking

Capital gain and loss. The following rules apply to

accounts, deposits in transit, change funds, petty cash

undistributed long-term capital gains on assets held more

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

than one year.

include advances to employees or officers or refundable

deposits paid to suppliers or others.

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

undistributed short-term capital gain and undistributed

Line 26. Savings and Temporary Cash

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

Investments

deemed distributed before any long-term capital gain.

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

For 2006, any long-term capital gains are deemed to

accounts and temporary cash investments, such as

be distributed in the following order:

money market funds, commercial paper, certificates of

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

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

distributed prior to any other class.

obligations that mature in less than one year.

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

Line 27. Accounts Receivable

deemed distributed prior to the all other long-term capital

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

Enter the total accounts receivable (reduced by the

class.

corresponding allowance for doubtful accounts) that

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

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

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

services. Claims against vendors or refundable deposits

gain class.

with suppliers or others may be reported here if not

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

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

deemed distributed last of any class.

Other assets.) Any receivables due from officers,

directors, trustees, foundation managers, or other

Carryover Rules

disqualified persons must be reported on line 28.

Receivables (including loans and advances) due from

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

other employees should be reported on line 36.

gains for any tax year:

Line 28. Receivables Due From Officers,

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

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

Directors, Trustees, and Other Disqualified

capital loss carryover to the next tax year.

Persons

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

Enter here (and in an attached schedule described

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

below) all receivables due from officers, directors,

capital loss carryover to the next tax year.

trustees, and other disqualified persons and all secured

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

and unsecured loans (including advances) to such

losses for any tax year:

persons.

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

Attached Schedule

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

not deemed distributed, a short-term capital gain

1. In the required schedule, report each loan

carryover to the next tax year.

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

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

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

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

Salary advances and other advances for personal use

extent not deemed distributed, a long-term capital gain

and benefit, and receivables subject to special terms or

carryover to the next tax year.

arising from transactions not functionally related to the

trust’s charitable purposes must be reported as separate

Part IV. Balance Sheet

loans for each officer, director, etc.

2. Receivables that are subject to the same terms and

Complete the balance sheet using the accounting

conditions (including credit limits and rate of interest) as

method the trust uses in keeping its books and records.

receivables due from the general public and that arose in

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

connection with an activity functionally related to the

must also complete column (c).

trust’s charitable purposes may be reported as a single

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

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

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

made in connection with official business of the trust may

and the related allowance for doubtful accounts or

also be reported as a single total.

depreciable assets and accumulated depreciation. Enter

the net amounts in column (b).

For each outstanding loan or other receivable that

must be reported separately, the attached schedule

Column (c)

should use a columnar format and show the following

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

information:

•

unitrust’s assets, take into account all assets and

Borrower’s name and title,

•

liabilities without regard to whether particular items are

Original amount,

•

taken into account in determining the income of the trust.

Balance due,

•

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

Date of note,

•

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

Maturity date,

•

taking the average of valuations made on more than one

Repayment terms,

•

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

Interest rate,

•

valuation date or dates and valuation methods are used

Security provided by the borrower,

•

each year. See Regulations section 1.664-3.

Purpose of the loan, and

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Instructions For Form 5227 Page 6

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