Instructions For Form 5227 (Page 11 of 15) in pdf

1. The trust owns more than 50% of the stock in any

Part II-A. Current Distributions

corporation that owns one or more foreign bank

Schedule (Section 664 trust only)

accounts.

2. At any time during the year, the trust had an

You must give each recipient listed in Part II-A a

interest in or signature or other authority over a bank,

Schedule K-1 (Form 1041) that reflects that recipient’s

securities, or other financial account in a foreign country.

current distribution. The following rules and worksheets

will help you figure the type of income a private

Exception. Check “No” if either of the following applies

beneficiary receives from the trust’s distributions. Also,

to the trust:

•

attach a copy of each Schedule K-1 to Form 5227. See

The combined value of the accounts was $10,000 or

the Specific Instructions for Schedule K-1 (Form 1041)

less during the whole year, or

•

for more information.

The accounts were with a U.S. military banking facility

operated by a U.S. financial institution.

Column (b). Beneficiary’s Identifying

Get Form TD F 90-22.1, Report of Foreign Bank and

Number

Financial Accounts, to see if the trust is considered to

As a payer of income, the trust is required under section

have an interest in or signature or other authority over a

6109 to request and provide a proper identifying number

bank, securities, or other financial account in a foreign

for each recipient of income. Enter the recipient’s number

country. You can get Form TD F 90-22.1 from the IRS

on the respective Schedule K-1. Individuals and business

website at

recipients are responsible for giving you their taxpayer

If you checked “Yes” on line 95, file Form TD F

identification numbers upon request. You may use Form

90-22.1 by June 30, 2008, with the Department of the

W-9, Request for Taxpayer Identification Number and

Treasury at the address show on the form. Form TD F

Certification, to request the beneficiary’s identifying

90-22.1 is not a tax return, so do not file it with Form

number.

5227.

Penalty. Under section 6723, the payer is charged a

If you are required to file Form TD F 90-22.1 but

$50 penalty for each failure to provide a required

do not, you may have to pay a penalty of up to

taxpayer identification number, unless reasonable cause

$10,000 (more in some cases).

is established for not providing it. Explain any reasonable

CAUTION

cause in a signed affidavit and attach it to this return.

Signature

Substitute Forms

Form 5227 must be signed by the trustee or by an

You do not need prior IRS approval for substitute

authorized representative.

Schedules K-1 if it is an exact copy of the IRS schedule.

If you, as trustee (or an employee or officer of the

The boxes must use the same numbers and titles and

trust), fill in Form 5227, the Paid Preparer’s space should

must be in the same order and format as on the

remain blank. If someone prepares this return without

comparable IRS Schedule K-1. The substitute schedule

charge, that person should not sign the return.

must include the OMB number. You must request IRS

approval to use other substitute Schedules K-1. To

Generally, anyone who is paid to prepare a tax return

request approval, write to:

must sign the return and fill in the other blanks in the Paid

Preparer’s Use Only area of the return.

Internal Revenue Service

If you have questions about whether a preparer is

Attention: Substitute Forms Program Coordinator

required to sign the return, please contact an IRS office.

SE:W:CAR:MP:T:T:SP, IR-6526

1111 Constitution Avenue, NW

The person required to sign the return as the preparer

Washington, DC 20224

must:

•

Complete the required preparer information,

You may be subject to a penalty if you file a

•

Sign it in the space provided for the preparer’s

Schedule K-1 that does not conform to the

signature (a facsimile signature is acceptable), and

specifications in Pub. 1167, General Rules and

•

CAUTION

Give the trustee a copy of the return in addition to the

Specifications for Substitute Forms and Schedules.

copy to be filed with the IRS.

Inclusion of Amounts in Recipients’ Income

Schedule A—Distributions, Assets,

If there are two or more recipients, each will be treated as

and Donor Information

receiving his or her pro rata share of the various classes

of income or corpus.

Note. Schedule A is not open to public inspection.

Amounts distributed by a charitable remainder annuity

Part I. Accumulation Schedule

trust or a charitable remainder unitrust have the following

characteristics in the hands of the recipients:

(Section 664 trust only)

•

First, as ordinary income to the extent of ordinary

income for the current year and undistributed ordinary

Line 2a. Enter the total of all distributions for 2007.

income for prior years of the trust. Ordinary income is

Line 2b. Enter the amount distributed from each income

computed without regard to any net operating loss

category.

deductions under section 172. See the Ordering Rules

You may want to read the Part II-A instructions

for Ordinary Income on page 12.

•

TIP

and complete all worksheets (as necessary)

Second, as capital gains to the extent of the trust’s

before you make an entry on Part II-A of

undistributed capital gains. Undistributed capital gains of

Schedule A.

the trust are determined on a cumulative net basis

-11-

Instructions For Form 5227 Page 11

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