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include an employee of the trust who

Department of the Treasury has the authority to act.

Internal Revenue Service A disqualified person is:
1. A substantial contributor;
2. A foundation manager;

Instructions for Form 5227 3. A person who owns more than 20%
of a corporation, partnership, trust, or
unincorporated enterprise, which is itself
a substantial contributor;
Split-Interest Trust Information Return 4. A member of the family of an
individual in the first three categories; or
Section references are to the Internal Revenue Code, unless otherwise noted. 5. A corporation, partnership, trust, or
estate in which persons described in 1,
Even though the trust is exempt from 2, 3, or 4 above own a total beneficial
Paperwork Reduction Act Notice
Federal income tax, it must file Form interest of more than 35%.
We ask for the information on this form 6. For purposes of section 4943
5227 each year.
to carry out the Internal Revenue laws of (excess business holdings), a
the United States. You are required to Who Must File disqualified person also includes:
give us the information. We need it to
ensure that you are complying with All charitable remainder trusts described a. A private foundation which is
these laws and to allow us to figure and in section 664, pooled income funds effectively controlled (directly or
collect the right amount of tax. described in section 642(c)(5), and indirectly) by the same persons who
charitable lead trusts (see “Exception” control the trust in question, or
The time needed to complete and file below) must file Form 5227.
this form will vary depending on b. A private foundation substantially all
individual circumstances. The estimated Exception.—Generally, a split-interest of the contributions to which were made
average time is: trust created before May 27, 1969, is not (directly or indirectly) by the same
required to file Form 5227. However, if person or persons described in 1, 2, or
Recordkeeping 46 hr., 52 min. any amounts were transferred to the 3 above, or members of their families,
Learning about the law trust after May 26, 1969, for which a within the meaning of section 4946(d),
or the form 3 hr., 30 min. deduction was allowed under any of the who made (directly or indirectly)
sections listed under section 4947(a)(2), substantially all of the contributions to
Preparing the form 10 hr. Form 5227 must be filed for the year of the trust in question.
Copying, assembling, the transfer and all subsequent years 7. For purposes of section 4941
and sending the form regardless of whether additional (self-dealing), a disqualified person also
to the IRS 1 hr., 37 min. transfers are made in subsequent years. includes certain government officials.
If you have comments concerning the Charitable lead trusts and charitable (See section 4946(c) and the related
accuracy of these time estimates or remainder trusts whose charitable regulations.)
suggestions for making this form more interests involve only war veterans’
posts or cemeteries described in Additional Information
simple, we would be happy to hear from
you. You can write to both the Internal sections 170(c)(3) and 170(c)(5), For additional information on private
Revenue Service, Attention: Reports respectively, are not required to foundations and foundation managers,
Clearance Officer, PC:FP, Washington, complete Parts VI and VII of Form 5227. see Pub. 578, Tax Information for
DC 20224; and the Office of Private Foundations and Foundation
Definitions Managers, available free at most IRS
Management and Budget, Paperwork
Reduction Project (1545-0196), A split-interest trust is a trust that: offices. To order publications and forms,
Washington, DC 20503. DO NOT send ● Is not exempt from tax under section call our toll-free number
the tax form to either of these offices. 501(a); 1-800-TAX-FORM (1-800-829-3676).
Instead, see Where To File on page 2. ● Has some unexpired interests that are Additional Forms You May Have
devoted to purposes other than To File
religious, charitable, or similar purposes
General Instructions described in section 170(c)(2)(B); and You may also be required to file one or
more of the following forms:
● Has amounts transferred in trust after
Change To Note May 26, 1969, for which a deduction ● Form 56, Notice Concerning Fiduciary
● Form 5227 is now revised annually. was allowed under one of the Code Relationship.
This version is to be used by trustees sections listed in section 4947(a)(2). ● Form 1041, U.S. Fiduciary Income Tax
only for the 1993 calendar year. A split-interest trust is subject to many Return.
of the same requirements and ● Form 1041-A, U.S. Information
Purpose of Form restrictions that are imposed on private Return—Trust Accumulation of
Use Form 5227 to report the financial foundations. Charitable Amounts.
activities of a split-interest trust A recipient is a beneficiary who ● Form 1041-ES, Estimated Income Tax
described in section 4947(a)(2); and to receives the possession or beneficial for Fiduciaries.
determine whether the trust is treated as enjoyment of the unitrust or annuity ● Form 4720, Return of Certain Excise
a private foundation and is subject to amount. Taxes on Charities and Other Persons
the excise taxes under Chapter 42.
A foundation manager is an officer, Under Chapters 41 and 42 of the
A charitable remainder annuity trust or director, or trustee (or an individual who Internal Revenue Code.
unitrust is exempt from Federal income has powers or responsibilities similar to ● Form 8822, Change of Address.
tax for any tax year if it: those of officers, directors, or trustees).
● Was created after July 31, 1969, and In the case of any act or failure to act,
● Has no unrelated business taxable the term “foundation manager” may also
income for the tax year.
Cat. No. 13228E
Period To Be Covered by Return 1. A copy of the trust instrument; and completed Form SS-4 to your Form
2. A written declaration under 5227.
File Form 5227 for each calendar year.
This revision of the form is for the 1993 penalties of perjury that it is a true and
complete copy.
B. Type of Entity
calendar year.
For sample forms of trusts that meet Charitable lead trust.—This is a trust
Accounting Methods the requirements of a charitable that pays a fixed annuity or unitrust
remainder unitrust, see Rev. Proc. 89-20, amount to a charitable organization for a
Trust income must be computed using
1989-1 C.B. 841, Rev. Proc. 90-30, fixed number of years. Upon termination
the method of accounting regularly used
1990-1 C.B. 534, and Rev. Proc. 90-31, of the payments, the remainder interest
in keeping the trust’s books and records.
1990-1 C.B. 539. is transferred to a noncharitable
Generally, permissible methods include
the cash method, the accrual method, or For sample forms of a trust that meet
any other method authorized by the the requirements of a charitable Charitable remainder annuity trust.—
Internal Revenue Code. The method remainder annuity trust, see Rev. Proc. This is a trust under section 664(d)(1)
used must clearly reflect income. 89-21, 1989-1 C.B. 842, and Rev. Proc. that pays a fixed dollar amount, at least
90-32, 1990-1 C.B. 546. annually, to one or more beneficiaries, at
Unless otherwise allowed by law, the
least one of which is not a charitable
trust may not change the accounting
method used to report income (for
Rounding Off to Whole Dollars organization, for life, or for a specified
number of years (not to exceed 20).
income as a whole or for any material You may show the money items on the
Upon termination of the payments, the
item) without first getting consent on return and accompanying schedules as
remainder interest is transferred to a
Form 3115, Application for Change in whole-dollar amounts. To do so, drop
charitable organization described in
Accounting Method. See Pub. 538, amounts less than 50 cents and
section 170(c).
Accounting Periods and Methods, for increase any amounts from 50 to 99
more information. cents to the next dollar. Charitable remainder unitrust.—This is
a trust under section 664(d)(2) similar to
When To File Attachments a charitable remainder annuity trust,
If you need more space, attach separate except that it pays, at least annually, a
File Form 5227 for calendar year 1993
sheets showing the same information in fixed percentage (not less than 5%) of
on or before April 15, 1994.
the same order as on the printed forms. the net fair market value of the trust’s
Extension of Time To File Show the totals on the printed forms. assets.
Use Form 2758, Application for Enter the trust’s employer Pooled income fund.—This is a trust
Extension of Time To File Certain Excise, identification number on each sheet. under section 642(c)(5) created and
Income, Information, and Other Returns, Also, use sheets that are the same size maintained by a charitable organization
to request an extension of time to file. as the forms and indicate clearly the line described in section 170(b)(1)(A)(i)-(iv).
of the printed form to which the Donors to the fund receive a lifetime
Where To File information relates. income interest and the charitable
organization receives the remainder
If the principal Use the following
office of the Internal Revenue
trust Service Center
is located in address Specific Instructions E. Initial Return, Final Return,
Ä Ä Amended Return; or Change of
Identification Area Name or Address
Alabama, Arkansas, Florida,
Georgia, Louisiana, If you received a Form 5227 from the Initial Return.—Check this box if this is
Atlanta, GA 39901
Mississippi, North Carolina, IRS with a pre-addressed label, attach the initial return for the split-interest
South Carolina, Tennessee the label to the name and address area trust. Also, be sure to enter the date that
Arizona, Colorado, Kansas, of the return. If the name or address on the entity was created in the space
New Mexico, Oklahoma, Austin, TX 73301 the label is wrong, draw a line through provided.
Texas, Utah, Wyoming the incorrect portion and enter the
correct information. Final Return.—Check this box if this is
Indiana, Kentucky,
a final return because the trust has
Michigan, Ohio, Cincinnati, OH 45999 If you did not receive a pre-addressed terminated. Also, check the “Final K-1”
West Virginia label, complete the information called for box at the top of the Schedule K-1
Alaska, California, Hawaii, at the top of the form as it appears on (Form 1041).
Idaho, Nevada, Oregon, Fresno, CA 93888 Form SS-4, Application for Employer
Washington Identification Number. Amended Return.—If you are filing an
amended 1993 Form 5227, check the
Connecticut, Maine,
Massachusetts, New Address “Amended return” box. Complete the
Holtsville, NY 00501 entire return and correct the appropriate
Hampshire, New York, Include the suite, room, or other unit
Rhode Island, Vermont line(s) with the new information. On an
number after the street address.
Illinois, Iowa, Minnesota,
attachment, explain the reason for the
If the postal service does not deliver change(s) and identify the line(s) and
Missouri, Montana,
Nebraska, North Dakota,
Kansas City, MO 64999 mail to the street address and the amount(s) being changed.
South Dakota, Wisconsin trustee has a P.O. box, show the box
If the amended return results in a
number instead of the street address.
Delaware, District of change to income, or a change in
Columbia, Maryland, A. Employer Identification Number distribution of any income or other
New Jersey, Pennsylvania, information provided to a recipient, an
Virginia, any U.S.
Philadelphia, PA 19255 (EIN)
possession, or foreign
amended Schedule K-1 (Form 1041)
Every trust must have an employer must be filed with the amended Form
identification number (EIN). To apply for 5227 and also given to each recipient.
one, use Form SS-4. You may get this Check the “Amended K-1” box at the
Trust Instrument form from the IRS or the Social Security top of the Schedule K-1 (Form 1041).
When you file the first return for a Administration. If you have not yet Change of Name or Address.—If there
charitable remainder annuity trust or applied for a number, attach a has been a change in the trustee’s name
unitrust, include: or address, check the appropriate box.
Page 2
F. Unrelated Business Taxable Line 4—Rents, Royalties, tax-exempt income, see the instructions
Income (section 664 trusts only) Partnerships, Other Estates and for Form 1041.
Trusts, etc. All Federal income taxes for which the
If the charitable remainder trust has any
unrelated business taxable income Use Schedule E (Form 1040), split-interest trust is liable because it has
(within the meaning of section 512 and Supplemental Income and Loss, to unrelated business taxable income, and
related regulations) for 1993, it is subject report the trust’s income or (losses) from all taxes imposed by Chapter 42 of the
to the same taxes (including estimated rents, royalties, partnerships, S Internal Revenue Code (relating to
tax payments) that are imposed on corporations, other estates and trusts, private foundations), are allocated to
complex trusts under subchapter J of and REMICs. Enter the net profit or corpus.
the Internal Revenue Code. It cannot be (loss) from Schedule E on line 4. See the
taxed as a grantor trust. instructions for Schedule E (Form 1040) Part II—Accumulation
If you answer “Yes,” in addition to for reporting requirements. If the trust Schedule
Form 5227, file Form 1041 (if a domestic received a Schedule K-1 from a
partnership, S corporation, or other Report the income (both current and
trust). Report the unrelated business cumulative undistributed income) of the
income and compute any tax due (using flow-through entity, use the
corresponding lines on Form 5227 to trust for purposes of determining the
the 1993 Tax Rate Schedule) on character of distributions in three
Schedule G of Form 1041. You must report the interest, dividends, capital
gains, etc., from the flow-through entity. categories:
also complete Schedule H to determine
whether the trust is subject to any 1. Ordinary income,
Line 5—Farm Income or (Loss)
alternative minimum tax. 2. Capital gains and losses, and
If the trust operated a farm, use 3. Nontaxable income.
DO NOT complete Schedule B of Schedule F (Form 1040), Profit or Loss
Form 1041 as the trust will report any From Farming, to report farm income A loss in any one of the three
distributions in Part III of Form 5227 and expenses. Enter the net profit or categories may not be used to reduce a
applying the rules discussed in (loss) from Schedule F on line 5. gain in any other category. For example,
Inclusion of Amounts in Recipients’ a capital loss may not be used to reduce
Income. Also, any unrelated business Line 6—Ordinary Gain or (Loss) ordinary income. However, a loss in any
income tax paid by the trust is to be one category may be used to reduce
Enter from Form 4797, Sales of
allocated to corpus. undistributed gain for earlier years within
Business Property, the gain or loss from
the sale or exchange of property other that same category, and any excess may
Part I—Ordinary Income be carried forward to reduce gain in
than capital assets and also from
Line 1—Interest Income involuntary conversions (other than future years within that same category.
Report all taxable interest income that casualty or theft). For more information,
was received by the trust. Examples of see the instructions for Form 4797. Part III—Current
taxable interest include interest from: Deductions
Distributions Schedule
● Accounts (including certificates of You must give each recipient listed in
deposit and money market accounts) Deductions are to be allocated in the Part III a Schedule K-1 (Form 1041) that
with banks, credit unions, and thrifts. following manner: reflects his or her respective current
● Notes, loans, and mortgages. 1. Allowable deductions directly distribution. Also, attach a copy of each
attributable to one or more classes of Schedule K-1 to Form 5227. See the
● U.S. Treasury bills, notes, and bonds. income items (i.e., interest, dividends, or Specific Instructions for Schedule K-1
● U.S. savings bonds. rents) or corpus are allocated to such (Form 1041) for more information.
● Original issue discount. income classes or corpus.
● Income received as a regular interest 2. Allowable deductions not allocated Beneficiary’s Identifying Number
holder of a Real Estate Mortgage under 1 above are allocated on the basis As a payer of income, the trust is
Investment Conduit (REMIC). of gross income after directly required under section 6109 to request
For taxable bonds acquired after attributable deductions, to the extent of and provide a proper identifying number
December 31, 1987, amortizable bond such income. for each recipient of income. Enter the
premium is treated as an offset to the 3. Deductions not allocated under recipient’s number on the respective
interest income instead of as a separate either 1 or 2 above may be allocated in Schedule K-1. Individuals and business
interest deduction. See Pub. 550, any manner. recipients are responsible for giving you
Investment Income and Expenses. No deduction is ever allowed for: their taxpayer identification numbers
upon request. You may use Form W-9,
Line 2—Dividends ● The personal exemption under section
Request for Taxpayer Identification
Report all taxable dividends received by Number and Certification, to request the
● Charitable contributions under section beneficiary’s identifying number.
the trustee.
Penalty.—Under section 6723, the payer
Line 3—Business Income or (Loss) ● Net operating losses under section is charged a $50 penalty for each failure
If the trust operated a business, report 642(d). to provide a required taxpayer
the income and expenses on Schedule ● Income distribution deductions under identification number, unless reasonable
C (Form 1040), Profit or Loss From section 661. cause is established for not providing it.
Business (or Schedule C-EZ (Form ● Capital loss carryforwards under Explain any reasonable cause in a
1040), Net Profit From Business). See section 1212. signed affidavit and attach it to this
Unrelated Business Taxable Income ● Federal income taxes. return.
above. Enter the net profit or (loss) from
Schedule C or C-EZ on line 3. ● Federal excise taxes under Chapter Substitute Forms
You do not need prior IRS approval for
Any expense that is not deductible in substitute Schedules K-1 that follow the
determining taxable income and not specifications in Pub. 1167, Substitute
allocated to nontaxable income must be Printed, Computer-Prepared, and
allocated to corpus. For a discussion on Computer-Generated Tax Forms and
the allocation of deductions to
Page 3
Schedules, or that are an exact copy of income (but not loss) in each of the directors, trustees, foundation managers,
an IRS Schedule K-1. Other substitute above categories. or other disqualified persons must be
Schedules K-1 require approval. You The accumulation distribution rules do reported on line 30. Receivables
may apply for approval of a substitute not apply to charitable remainder trusts. (including loans and advances) due from
form by writing to: Internal Revenue See Regulations section 1.664-1(d). other employees should be reported on
Service; Attention: Substitute Forms Short tax years.—To figure the annuity line 38.
Program Coordinator, R:I:F; P.O. Box or unitrust amount for short tax years,
969, Oxon Hill, MD 20750. Line 30—Receivables Due From
multiply the annuity or unitrust amount Officers, Directors, Trustees, and
Inclusion of Amounts in by the number of days in the trust’s tax Other Disqualified Persons
Recipients’ Income year, and then divide the result by 365
(or 366 in leap years). Enter here (and in an attached schedule
If there are two or more recipients, each described below) all receivables due
will be treated as receiving his or her pro from officers, directors, trustees, and
rata share of the various classes of
Part IV—Balance Sheet other disqualified persons and all
income or corpus. Complete the balance sheet using the secured and unsecured loans (including
accounting method the trust uses in advances) to such persons.
Amounts distributed by a charitable
remainder annuity trust or a charitable keeping its books and records. All filers
must complete columns (a) and (b). All Attached Schedule.—
remainder unitrust have the following 1. In the required schedule, report
characteristics in the hands of the unitrusts must also complete column (c).
When space is provided to the left of each loan separately, even if more than
recipients: one loan was made to the same person,
● First, as ordinary income to the extent column (a) for reporting receivables and
the related allowance for doubtful or the same terms apply to all loans
of current and undistributed ordinary made.
income for prior years of the trust. accounts or depreciable assets and
accumulated depreciation, enter the Salary advances and other advances
Ordinary income is computed without for personal use and benefit, and
regard to any net operating loss end-of-year figures.
receivables subject to special terms or
deductions under section 172. Column (c) arising from transactions not functionally
● Second, as capital gains to the extent related to the trust’s charitable purposes
of the trust’s undistributed capital gains. In computing the net fair market value
(FMV) of the unitrust’s assets, take into must be reported as separate loans for
Undistributed capital gains of the trust each officer, director, etc.
are determined on a cumulative net account all assets and liabilities without
regard to whether particular items are 2. Receivables that are subject to the
basis under the following rules without same terms and conditions (including
regard to any capital loss carrybacks taken into account in determining the
income of the trust. The net FMV of the credit limits and rate of interest) as
and carryovers: receivables due from the general public
trust’s assets may be determined on any
1. If, in any tax year of the trust, the one date during the taxable year of the and that arose in connection with an
trust has both undistributed short-term trust, or by taking the average of activity functionally related to the trust’s
capital gain and undistributed long-term valuations made on more than one date charitable purposes may be reported as
capital gain, the short-term capital gain during the tax year of the trust, so long a single total for all the officers,
is deemed distributed before any as the same valuation date or dates and directors, etc. Travel advances made in
long-term capital gain. valuation methods are used each year. connection with official business of the
2. If the trust has capital losses in See Regulations section 1.664-3. trust may also be reported as a single
excess of capital gains for any tax year: total.
Line 27—Cash—Non-Interest Bearing For each outstanding loan or other
a. The excess of the net short-term
capital loss over the net long-term Enter the amount of cash on deposit in receivable that must be reported
capital gain for that year is a short-term checking accounts, deposits in transit, separately, the attached schedule should
capital loss in the next tax year. change funds, petty cash funds, or any show the following information
b. The excess of the net long-term other non-interest-bearing account. Do (preferably in columnar format):
capital loss over the net short-term not include advances to employees or ● Borrower’s name and title.
capital gain for that year is a long-term officers or refundable deposits paid to ● Original amount.
capital loss in the next tax year. suppliers or others.
● Balance due.
3. If the trust has capital gains in Line 28—Savings and Temporary Cash ● Date of note.
excess of capital losses for any tax year: Investments
● Maturity date.
a. The excess of the net short-term Enter the total of cash in savings or
capital gain over the net long-term ● Repayment terms.
other interest-bearing accounts and
capital loss for that year is, to the extent ● Interest rate.
temporary cash investments, such as
not deemed distributed, a short-term money market funds, commercial paper, ● Security provided by the borrower.
capital gain in the next tax year. certificates of deposit, and U.S. Treasury ● Purpose of the loan.
b. The excess of the net long-term bills or other governmental obligations ● Description and FMV of the
capital gain over the net short-term that mature in less than one year. consideration furnished by the lender.
capital loss for that year is, to the extent
not deemed distributed, a long-term Line 29—Accounts Receivable The above detail is not required for
capital gain in the next tax year. receivables or travel advances that may
Enter the total accounts receivable be reported as a single total (see
● Third, as nontaxable income to the (reduced by the corresponding instruction 2 above). However, report
extent of the trust’s nontaxable income allowance for doubtful accounts) that and identify those totals separately in
for the current year and undistributed arose from the sale of goods and/or the the attachment.
nontaxable income for prior years. performance of services. Claims against
● Fourth, as a distribution of trust vendors or refundable deposits with Line 31—Other Notes and Loans
corpus. For this purpose, “trust corpus” suppliers or others may be reported here Receivable
means the net fair market value of the if not significant in amount. (Otherwise, Enter the combined total of notes
trust assets less the total undistributed report them on line 38, Other Assets.) receivable and net loans receivable.
Any receivables due from officers,
Page 4
Notes Receivable.—Enter the amount properties. Attach a schedule listing Line 42—Loans From Officers,
of all notes receivable not listed on line these investment fixed assets held at Directors, Trustees, and Other
30 and not acquired as investments. the end of the year and showing, for Disqualified Persons
Attach a schedule similar to that called each item or category listed, the cost or Enter the unpaid balance of loans
for in the line 30 instructions. The other basis, accumulated depreciation, received from officers, directors,
schedule should also identify the and book value. trustees, and other disqualified persons.
relationship of the borrower to any For loans outstanding at the end of the
officer, director, trustee, or other Line 36—Investments—Other
year, attach a schedule that provides (for
disqualified person. Enter the amount of all other investment each loan) the name and title of the
For a note receivable from any section holdings not reported on line 34 or 35. lender and the information specified in
501(c)(3) organization, list only the name Attach a schedule describing each of the line 30 instructions.
of the borrower and the balance due on these investments held at the end of the
the required schedule. year. Show the book value for each and Line 43—Mortgages and Other Notes
Loans Receivable.—Enter the gross indicate whether the investment is listed Payable
amount of loans receivable, less the at cost or end-of-year market value. Do Enter the amount of mortgages and
allowance for doubtful accounts, arising not include program-related investments. other notes payable at the beginning
from the normal activities of the trust. See instructions for line 38. and end of the year. Attach a schedule
An itemized list of these loans is not Line 37—Land, Buildings, and showing, as of the end of the year, the
required, but attach a schedule Equipment total amount of all mortgages payable
indicating the total amount of each type and, for each nonmortgage note
of loan outstanding. Report loans to Enter the book value (cost or other basis payable, the name of the lender and the
officers, directors, trustees, or other less accumulated depreciation) of all other information specified in the line 30
disqualified persons on line 30, and land, buildings, and equipment owned instructions. The schedule should also
loans to other employees on line 38. by the trust and not held for investment. identify the relationship of the lender to
This includes any equipment owned and any officer, director, trustee, or other
Line 32—Inventories for Sale or Use used by the trust in conducting its disqualified person.
Enter the amount of materials, goods, charitable activities. Attach a schedule
and supplies purchased or manufactured listing these fixed assets held at the end Line 44—Other Liabilities
by the trust and held for sale or use in of the year and showing for each item or List and show the amount of each
some future period. category listed, the cost or other basis, liability not reportable on lines 40
accumulated depreciation, and book through 43. Attach a separate schedule
Line 33—Prepaid Expenses and value. if more space is needed.
Deferred Charges
Line 38—Other Assets Both annuity trusts and unitrusts
Enter the amount of short-term and should include any advances from
long-term prepayments of future List and show the book value of each
category of assets not reportable on trustees on line 44. Unitrusts should also
expenses attributable to one or more include any unitrust amounts applicable
future accounting periods. Examples lines 27 through 37. Attach a separate
schedule if more space is needed. to prior periods that are unpaid as of the
include prepayments of rent, insurance, valuation date, since such amounts
and pension costs, and expenses One type of asset reportable on line reduce the net FMV of the trust’s assets.
incurred in connection with a solicitation 38 is program-related investments made
campaign to be conducted in a future primarily to accomplish a charitable
accounting period. purpose of the trust rather than to Part V-B—Charitable
produce income. Remainder Unitrust
Lines 34a, b, and c—Investments—
Government Obligations, Corporate Liabilities Information
Stocks, and Bonds Line 51a
Line 40—Accounts Payable and
Enter the book value (which may be Accrued Expenses Enter the unitrust fixed percentage
market value) of these investments. (which may not be less than 5%).
Attach a schedule that lists each Enter the total accounts payable to
security held at the end of the year and suppliers and others, and accrued Line 53a
shows whether the security is listed at expenses such as salaries payable,
accrued payroll taxes, and interest Figure the total accrued distribution
cost (including the value recorded at the deficiencies from previous years as
time of receipt in the case of donated payable.
securities) or end-of-year market value. Line 41—Revenue Designated for 1. Aggregate the unitrust’s net asset
Do not include amounts shown on line Future Periods FMV for each previous year.
28. Governmental obligations reported
on line 34a are those that mature in one Enter the amount of contributions, 2. Multiply 1 above by the unitrust’s
year or more. Debt securities of the U.S. governmental fees or grants, grants from fixed percentage.
Government may be reported as a single other organizations, other fees and 3. From the result in 2, subtract the
total rather than itemized. Obligations of support that contributors or grantors aggregate trust income that was
state and municipal governments may have designated as payable for or distributed for previous years.
also be reported as a lump-sum total. applicable to one or more future years,
Do not combine U.S. Government either by the terms of the gift or by the Line 54
obligations with state and municipal terms of the contract or other Enter the total unitrust dollar amount. If
obligations on the attached schedule. arrangement. Do not include any there is more than one recipient, attach
amounts restricted for future use by the a schedule showing the percentage of
Line 35—Investments—Land, trust’s own governing instrument. Attach the total unitrust dollar amount payable
Buildings, and Equipment a schedule that describes each to each recipient. The sum of these
Enter the book value (cost or other basis contribution or grant designated for one individual shares should be 100%.
less accumulated depreciation) of all or more future periods and indicate the
land, buildings, and equipment held for total amount of each item and the
investment purposes, such as rental amount applicable to each future period.

Page 5
Line 55 contains mandatory directions conflicting 15-year grace period expired on May 25,
This amount is to be used in with any of its requirements and the 1984. This period applied when a trust
determining future accrued distribution trust has such mandatory directions in and all disqualified persons together
deficiencies. its governing instrument, then the trust held 75% or more (but not more than
has not satisfied the requirements of 95%) interest in a business enterprise.
section 508(e) by the operation of that The 20-year grace period expired on
Part VI—Statements state law. May 25, 1989. It applied if the combined
Regarding Activities Line 2
holdings were more than 95%.
Answer every question in this section. If In general, a “business enterprise”
a line does not apply, enter “N/A.” The activities listed on lines 2a(1) means the active conduct of a trade or
through (6) are considered self-dealing business, including any activity that is
Complete Part VI to determine under section 4941 unless one of the regularly conducted to produce income
whether the split-interest trust should be exceptions described in Chapter VIII of from selling goods or performing
treated as a private foundation and Pub. 578 applies. services, that is an unrelated trade or
therefore subject to excise taxes. These
The terms “disqualified person” and business under section 513.
taxes may be imposed upon either the
trust, the trustee, or both. These excise “foundation manager” are defined on The term “business enterprise” does
taxes include: page 1. not include:
● The section 4941 tax on self-dealing Line 3a 1. A functionally related business,
between the trust and “disqualified defined in section 4942(j)(4); or
Under section 4947(b)(3)(A), a
persons.” 2. A trade or business if at least 95%
split-interest trust is not subject to the
● The section 4943 tax on excess of its gross income is derived from
excess business holdings tax (section
business holdings. passive sources.
4943) or tax on investments that
● The section 4944 tax on investments jeopardize the trust’s charitable purpose See section 4943(d)(3) for additional
that jeopardize the trust’s charitable (section 4944) if all the income interest items that are included in gross income
purposes. (and none of the remainder interest) of from passive sources.
● The section 4945 tax on taxable the trust is devoted solely to one or Line 4a
expenditures. more of the charitable purposes
described in section 170(c)(2)(B). In A private foundation is not treated as
The split-interest trust pays these having excess business holdings in any
addition, all amounts in the trust for
taxes on Form 4720. For a detailed enterprise if, together with related
which a charitable contribution
explanation of each of these taxes, see foundations, it owns 2% or less of the
deduction was allowed under section
the instructions for Form 4720. voting stock and 2% or less in value of
170 (for individual taxpayers) or similar
The excise taxes on private Code section for personal holding all outstanding shares of all classes of
foundations do not apply to any companies, foreign personal holding stock. A similar exception applies to a
amounts: companies, estates or trusts (including a beneficial or profits interest in any
1. Payable under the terms of the deduction for estate or gift tax business enterprise that is a trust or
trust to income beneficiaries, unless a purposes), cannot have a total value of partnership.
deduction was allowed under sections more than 60% of the total FMV of all
170(f)(2)(B), 2055(e)(2)(B), or Line 5
amounts in the trust.
2522(c)(2)(B); In general, an investment which
Line 3b jeopardizes any of the charitable
2. In trust for which a charitable
contribution deduction was not allowed Under section 4947(b)(3)(B), a purposes of a trust is one in which a
under any provision of the Code, if the split-interest trust is not subject to the foundation manager did not exercise
amounts are segregated (as defined in section 4943 or 4944 taxes if a ordinary business care in making the
section 4947(a)(3)) from amounts for deduction was allowed under section investment to provide for the long- and
which a deduction was allowable; or 170 (and related provisions for other short-term financial needs of the trust in
entities) for amounts payable under the carrying out its charitable purposes.
3. Transferred in trust before May 27,
1969. terms of the trust to every remainder For more information on investments
beneficiary but not to any income which jeopardize charitable purposes,
Line 1 beneficiary. see Regulations section 53.4944-1.
A split-interest trust must have a Line 4 Line 6
governing instrument that requires the
trust to act or refrain from acting so as In general, excess business holdings are Grants by a trust to a public charity are
not to engage in an act of self-dealing the amount of stock or other interest in not taxable expenditures if the grants
under section 4941 or subject it to the a business enterprise that the trust must are not earmarked for use for any of the
excise taxes under section 4943, 4944, dispose of to a person other than a activities described on lines 6a(1)
or 4945. The trust may satisfy the disqualified person in order for the through 6a(5) and there is no oral or
requirements either by express language trust’s remaining holdings in the written agreement by which the trust
in its governing instrument or by the enterprise to be permitted holdings. may cause the public charity to engage
operation of state law which imposes In general, the combined permitted in any such prohibited activity or to
the above requirements on the trust or holdings of a trust and all disqualified select the recipient to which the grant is
treats these requirements as being persons may not be more than 20% of given.
contained in the governing instrument. If the voting power (or beneficial or profits Grants made to exempt operating
a trust claims it satisfies the interest, in the case of a trust or a foundations (as defined in section
requirements of section 508(e) by partnership) in any business enterprise. 4940(d)(2)) are not subject to the
operation of state law, the provisions of There were grace periods of 15 or 20 expenditure responsibility provisions of
state law must effectively impose the years for certain excess business section 4945. If the trust made grants to
requirements of section 508(e) on the holdings that the trust held on May 26, such organizations, you do not have to
trust. 1969. These holdings were considered file Form 4720 for those grants. See the
If, however, the state law does not held by disqualified persons rather than section 4945 regulations for more
apply to a governing instrument which the trust during the grace period. The information.
Page 6
Part VII—Questionnaire for Section B—Pooled Income Funds If you, as trustee (or an employee or
officer of the trust), fill in Form 5227, the
Charitable Lead Trusts and Line 2 Paid Preparer’s space should remain
Pooled Income Funds Upon termination of the income interest blank. If someone prepares this return
retained or created by a donor, the without charge, that person should not
Section A—Charitable Lead Trusts sign the return.
trustee is required to sever from the fund
Line 1 an amount equal to the value of the Generally, anyone who is paid to
remainder interest in the property upon prepare a tax return must sign the return
The information on this line is used to which the income interest is based. The and fill in the other blanks in the Paid
determine whether sections 4943 and amount severed from the fund must Preparer’s Use Only area of the return.
4944 apply for 1993. either be paid to, or retained for the use If you have questions about whether a
Line 3 of, the designated public charity, as preparer is required to sign the return,
provided in the governing instrument. please contact an IRS office.
Enter the amount for payments See Regulations section 1.642(c)-5(b)(8)
described in sections 170(f)(2)(B), The person required to sign the return
for valuation procedures.
2055(e)(2)(B), and 2522(c)(2)(B). as the preparer must complete the
required preparer information and:
Line 4 Signature ● Sign it, by hand, in the space provided
Enter the amount for payments Form 5227 must be signed by the for the preparer’s signature. (Signature
permitted by Regulations sections trustee or by an authorized stamps and labels are not acceptable.)
1.170A-6, 20.2055-2, and 25.2522(c)-3. representative. ● Give the trustee a copy of the return
in addition to the copy to be filed with
the IRS.

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