Instructions For Form 5227 - 2016 (Page 5 of 20) in pdf

any income or other information provided to a recipient, an

information on qualified dividends, including holding period

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

requirements.

amended Form 5227 and a copy given to each recipient.

Line 3. Business income or (loss). If the trust operated a

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

business, report the income and expenses on Schedule C,

(Form 1041).

Profit or Loss From Business (or Schedule C-EZ, Net Profit

Change of name or address. If there has been a change in

From Business) of Form 1040. Enter the net profit or loss

the trustee's name or address from the one used on the prior

from Schedule C or C-EZ on line 3. (Section 664 trusts, see

year's return (including a change to an “in care of” name and

G. Unrelated Business Taxable Income, earlier.)

address), check the appropriate box(es).

Line 4. Rents, royalties, partnerships, other estates and

If the address shown on Form 5227 changes after you file

trusts, etc. Use Schedule E (Form 1040), Supplemental

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

Income and Loss, to report the trust's income or losses from

address), file Form 8822-B to notify the IRS of the change.

rents, royalties, partnerships, S corporations, other estates

and trusts, and REMICs. Enter the net profit or loss from

G. Unrelated Business Taxable Income (Section

Schedule E on line 4. See the Instructions for Schedule E

664 trust only)

(Form 1040) for reporting requirements. If the trust received a

Schedule K-1 from a partnership, S corporation, or other

If a charitable remainder trust has any unrelated business

flow-through entity, use the corresponding lines on Form

taxable income (within the meaning of section 512 and

5227 to report the interest, dividends, capital gains, etc., from

related regulations) for 2016, the trust is liable for a tax under

the flow-through entity. (Section 664 trusts, see G. Unrelated

section 664(c)(2) which is treated as a Chapter 42 excise tax.

Business Taxable Income, earlier.)

The amount of the excise tax is equal to the amount of the

trust's unrelated business taxable income. If the trust has any

Line 5. Farm income or (loss). If the trust operated a farm,

unrelated business taxable income, answer “Yes” to Item G

use Schedule F (Form 1040), Profit or Loss From Farming, to

and file Form 4720, in addition to Form 5227, to report the

report farm income and expenses. Enter the net profit or loss

trust's unrelated business taxable income and the tax due.

from Schedule F on line 5. (Section 664 trusts, see G.

Part I. Income and Deductions

Unrelated Business Taxable Income, earlier.)

Note. If the trust has farm rental income and expenses

Section A—Ordinary Income

based on crops or livestock produced by a tenant, report the

Report the trust's ordinary income on lines 1 through 7.

income and expenses on Schedule E (Form 1040) and

include it on line 4. Don't use Form 4835, Farm Rental

Line 1. Interest income. Report all taxable interest income

Income and Expenses, or Schedule F (Form 1040) to report

that was received by the trust. Examples of taxable interest

such income and expenses and don't include the net profit

include interest from:

or (loss) from such income and expenses on line 5.

Accounts (including certificates of deposit and money

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

Line 6. Ordinary gain or (loss). Enter from Form 4797,

Notes, loans, and mortgages;

Sales of Business Property, the gain or loss from the sale or

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

exchange of property (other than capital assets) and also

U.S. savings bonds;

from involuntary conversions (other than casualty or theft).

Original issue discount; and

For more information, see the Instructions for Form 4797.

Income received as a regular interest holder of a Real

Line 7. Other income. List any other item and its amount

Estate Mortgage Investment Conduit (REMIC).

that is includable in gross income but not included in lines 1

For taxable bonds acquired after December 31, 1987,

through 6 (or Section B), on the dashed line to the left of the

amortizable bond premium is treated as an offset to the

entry space. If more space is needed, attach a statement.

interest income instead of as a separate interest deduction.

Enter the total of these items in the entry space to the right.

See Pub. 550, Investment Income and Expenses.

Section B—Capital Gains (Losses)

Line 2a. Ordinary dividends. Enter on line 2a the total of

Use Schedule D (Form 1041), Capital Gains and Losses, as

all ordinary dividends, including the qualified dividends

directed below. You may also need to complete Form 8949,

reported on line 2b.

Sales and Other Dispositions of Capital Assets. Lines 15 and

Line 2b. Qualified dividends. Report on this line all

16 of Schedule D (Form 1041) only apply to a charitable

qualified dividends received by the trust. In general, a

remainder trust (section 664 trust).

qualified dividend is a dividend received during the tax year

Line 9. Total short-term capital gain or (loss). Complete

from (a) a domestic corporation or (b) a qualified foreign

lines 1a through 5 and line 7 of the 2016 Schedule D (Form

corporation. A qualified dividend does not include any

1041). Don't make an entry on line 6 of Schedule D (Form

dividend from a corporation if the corporation is (or was)

1041). Enter the amount from line 7 of the Schedule D (Form

exempt from income tax under section 501 or 521 for the

1041) on line 9.

corporation's current or preceding tax year during which the

distribution was made.

Line 10. Total long-term capital gain or (loss). Complete

Generally, these dividends are reported to the trust in

lines 8a through 14 and line 16 of the 2016 Schedule D

box 1b of Form(s) 1099-DIV, Dividends and Distributions.

(Form 1041). Don't make an entry on line 15 of Schedule D

(Form 1041). Enter the amount from line 16 of Schedule D

Qualified dividends are treated as a separate class of

(Form 1041) on line 10.

ordinary income for purposes of ordering distributions. See

For section 664 trust only. Line 10 is the total of all

Ordering Rules for Ordinary Income later, for more

classes (described below) of long-term capital gain. The

information on distributions. See Pub. 550 for additional

following is a summary of the classes:

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Instructions for Form 5227

Instructions For Form 5227 - 2016 Page 5

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