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

Both annuity trusts and unitrusts should include any

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

advances from trustees on line 42. Unitrusts should also

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

include any unitrust amounts applicable to prior periods

Parts VI-A and VI-B. Statements

that are unpaid but required to be paid as of the valuation

date, since such amounts reduce the net FMV of the

Regarding Activities

trust’s assets. However, do not include any make-up

Answer every question in these sections. If a line does

amount for a net income charitable remainder trust

not apply, enter “N/A.”

(NIMCRUT).

Line 43. Total Liabilities

Part VI-A

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

Line 1

always have an entry, even if it is zero.

A split-interest trust must have a governing instrument

Line 47. Total Liabilities and Net Assets

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

Columns (a) and (b) must always have an entry, even if it

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

is zero.

or subject it to the excise taxes under section 4943,

4944, or 4945. The trust may satisfy the requirements

Parts V-A and V-B. Charitable

either by express language in its governing instrument or

Remainder Trust Information

by the operation of state law which imposes the above

requirements on the trust or treats these requirements as

being contained in the governing instrument. If a trust

Line 48b

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

To figure the total annual annuity amounts for a short tax

operation of state law, the provisions of state law must

year, see Short tax years below, under the line 53

effectively impose the requirements of section 508(e) on

instructions.

the trust.

Line 49a

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

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 2006 accounting income determined

be liable for certain foundation excise taxes. These

under the terms of the governing instrument and

excise taxes 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

previous year.

Instructions for Form 4720.

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);

Enter the total 2006 unitrust distributions reported in Part

2. In trust for which a charitable contribution deduction

III.

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

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.

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

Line 1

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

multiply the annuity or unitrust amount by the number of

The activities listed on lines 1a(1) through (6) are

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

considered self-dealing under section 4941 unless one of

365 (or 366 for leap years).

the exceptions described in sections 4941(d)(2)(D), (E),

For a unitrust whose governing instrument provides for

(F), or (G) applies. You may also access information

an income exception, if no valuation date occurs before

about self-dealing at

-8-

Instructions For Form 5227 Page 8

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