Instructions For Form 5227 - 2016 (Page 9 of 20) in pdf

Part VI-A

Line 55. Other liabilities. List and show the amount of each

liability not reportable on lines 51 through 54. Attach a

Line 73. A split-interest trust must have a governing

separate statement if more space is needed.

instrument that requires the trust to act or refrain from acting

Charitable remainder unitrusts must include any unitrust

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

amounts applicable to prior periods that are unpaid but

4941 or subject it to the excise taxes under section 4943,

required to be paid as of the valuation date, since such

4944, or 4945. The trust may satisfy the requirements either

amounts reduce the net FMV of the trust's assets. However,

by express language in its governing instrument or by the

don't include any make-up amount for a net income

operation of state law which imposes the above requirements

charitable remainder unitrust (NIMCRUT).

on the trust or treats these requirements as being contained

in the governing instrument. If a trust claims it satisfies the

Line 56. Total liabilities. Columns (a) and (b) (and column

requirements of section 508(e) by operation of state law, the

provisions of state law must effectively impose the

Line 60. Total liabilities and net assets. Columns (a) and

requirements of section 508(e) on the trust.

(b) must always have an entry, even if it is zero.

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

Parts V-A and V-B. Charitable

instrument which contains mandatory directions conflicting

with any of its requirements and the trust has such

Remainder Trust Information

mandatory directions in its governing instrument, then the

trust has not satisfied the requirements of section 508(e) by

Line 61b. To figure the total annual annuity amounts for a

the operation of that state law.

short tax year, see Short tax years, later.

Part VI-B

Line 65a. Enter the unitrust fixed percentage (which may not

be less than 5% or more than 50%).

Complete Part VI-B to determine whether the trust has

complied with the applicable Chapter 42 rules relating to

If there is more than one unitrust recipient, attach a

private foundations and whether the trust, trustee,

statement showing the percentage of the total unitrust dollar

disqualified persons, or some combination of these may be

amount payable to each recipient. The sum of these

liable for certain foundation excise taxes. These excise taxes

individual shares should be 100%.

include:

Line 65b. This line must always have an entry, even if it is

The section 4941 tax on self-dealing between the trust and

zero.

“disqualified persons,”

The section 4943 tax on excess business holdings,

Line 66a. Enter the trust's 2016 (fiduciary) accounting

The section 4944 tax on investments that jeopardize the

income determined under the terms of the governing

trust's charitable purposes, and

instrument and applicable local law. See section 643(b) and

The section 4945 tax on taxable expenditures.

Regulations sections 1.664-3(a)(1)(i)(b)(3) and 1.643(b)-1 for

more information.

The split-interest trust pays these taxes on Form 4720. For

Line 67a. Enter the amount, if any, from line 69 of the 2015

a detailed explanation of each of these taxes, see the

Form 5227.

Instructions for Form 4720.

If the amount entered isn't the same as line 69 from the

The excise taxes on private foundations don't apply to any

prior year's form, attach an explanation and a statement that

amounts:

supports the balance in the make-up account. Figure the total

1. Payable under the terms of the trust to income

deficiencies from previous years as follows.

beneficiaries, unless a deduction was allowed under section

1. Aggregate the unitrust's net asset FMV for each

170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B);

previous year.

2. In trust for which a charitable contribution deduction

2. Multiply (1) above by the unitrust's fixed percentage.

was not allowed under any section listed in section 4947(a)

3. From the result in (2), subtract the aggregate trust

(2)(B), if the amounts are segregated from amounts for which

income that was distributed for previous years.

a deduction was allowable; or

3. Transferred in trust before May 27, 1969.

Line 69. Use this amount to determine future accrued

accumulated distribution deficiencies.

Line 75. The activities listed on lines 75a(1) through (6) are

Short tax years. To figure the annuity amount (line 61b) or

considered self-dealing under section 4941 unless one of the

the unitrust amount (line 68) for short tax years, multiply the

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

annuity or unitrust amount by the number of days in the

(G) applies. You may also access information about

self-dealing at

trust's tax year, and then divide the result by 365 (or 366 for

leap years).

and click on the link for Life Cycle of a Private Foundation.

For a unitrust whose governing instrument provides for an

The terms disqualified person and foundation manager

income exception, if no valuation date occurs before the end

are defined under Definitions, earlier.

of the trust's tax year, value the trust's assets as of the last

Line 75b. If you answered “Yes” to any of the questions in

day of the trust's tax year.

line 75a, you should answer “Yes” to line 75b unless all of the

Parts VI-A and VI-B. Statements

acts engaged in were “excepted” acts. Excepted acts are

described in Regulations sections 53.4941(d)-3 and 4 or

Regarding Activities

appear in Notices published in the Internal Revenue Bulletin,

relating to disaster assistance. At the time this form went to

Answer every question in these sections. If a line does not

print, there were no Notices currently in effect relating to

apply, enter “N/A.”

disaster assistance for “excepted” acts to self-dealing.

-9-

Instructions for Form 5227

Instructions For Form 5227 - 2016 Page 9

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