2023

Instructions for Form 5227

Split-Interest Trust Information Return

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future Developments

For the latest information about developments related to 

Form 5227 and its instructions, such as legislation enacted 

after they were published, go to IRS.gov/Form5227.

What’s New

Electronic filing. Under final regulations (T.D. 9972) issued 

in February 2023, filers are required to file Form 5227 

electronically if they file 10 or more returns in the aggregate in 

a calendar year. The regulations are effective for returns 

required to be filed for tax years ending on or after December 

31, 2023. See Where To File for more information.

Reminders

Don't include social security numbers on publicly disclosed forms. With the exception of the items described 

below, Form 5227 and its attachments are subject to public 

disclosure. Items not subject to disclosure include 

Schedule A (and any related early termination agreement); 

Schedule K-1; any K-1 continuation pages and transmittals; 

the trust agreement; trust amendments; Form 926, Return by 

a U.S. Transferor of Property to a Foreign Corporation; Form 

8582, Passive Activity Loss Limitations; Form 8621, 

Information Return by a Shareholder of a Passive Foreign 

Investment Company or Qualified Electing Fund; and any 

attachment that references contributor or donor information.

General Instructions

Purpose of Form

Use Form 5227 to:

• Report the financial activities of a split-interest trust,

• Provide certain information regarding charitable 

deductions and distributions of or from a split-interest trust, 

and

• Determine if the trust is treated (for chapter 42 excise tax 

purposes) as a private foundation and subject to certain 

excise taxes under chapter 42.

Form 5227 is open to public inspection.

Use Schedule A of Form 5227 to report:

• Accumulations of income for charitable remainder trusts,

• Distributions to noncharitable beneficiaries/recipients, and

• Information about donors and assets contributed during 

the year.

Schedule A of Form 5227 isn't open for public 

inspection.

Who Must File

All charitable remainder trusts described in section 664 must 

file Form 5227. All pooled income funds described in section 

642(c)(5) and all other trusts such as charitable lead trusts 

that meet the definition of a split-interest trust under section 

4947(a)(2) must file Form 5227 unless the Exception next 

applies.

Exception. A split-interest trust described below isn't 

required to file Form 5227 if:

• The split-interest trust was created before May 27, 1969, 

and

• All transfers of corpus to the trust occurred before May 27, 

1969, or

• As to each and every transfer of corpus to the trust made 

after May 26, 1969, no deduction was allowed under any of 

the sections listed in section 4947(a)(2).

If a split-interest trust created before May 27, 1969, 

receives a contribution to corpus after May 26, 1969, for 

which a deduction is allowed under any of the sections listed 

in section 4947(a)(2), the trust will cease to qualify for the 

exception described above. In that case, the split-interest 

trust must file Form 5227 for the year when the transfer to 

corpus occurs and each subsequent year, the same as any 

split-interest trust created after May 26, 1969.

Note. Regulations section 1.6012-3(a)(6) references Form 

1041-B, Charitable Remainder Trust. Form 5227 replaces 

Form 1041-B. Regulations section 1.6034-1 references Form 

1041-A, U.S. Information Return Trust Accumulation of 

Charitable Amounts. Form 5227 replaces Form 1041-A for 

split-interest trusts.

Which Parts To Complete

The term “split-interest trust” refers to trusts of various types. 

See the Definitions section of these instructions below. 

Certain parts of Form 5227 apply exclusively to a particular 

type of split-interest trust (such as a charitable remainder 

trust, also referred to as a “section 664 trust”). Parts or lines 

that apply exclusively to a particular type of split-interest trust 

are identified in these instructions and on Form 5227 with a 

parenthetical identifying the type of trust to which the part or 

line applies. Parts or lines that aren't indicated as applying to 

a particular type of split-interest trust should be completed by 

every type of split-interest trust with one exception. Parts VII 

and VIII aren't completed by a charitable remainder or 

charitable lead trust whose charitable interests involve only 

war veterans' posts or cemeteries (as described in sections 

170(c)(3) and 170(c)(5)).

Definitions

Split-interest trust. A split-interest trust is a trust that:

• Is not exempt from tax under section 501(a);

• Has some unexpired interests that are devoted to 

purposes other than religious, charitable, or similar purposes 

described in section 170(c)(2)(B); and

• Has amounts transferred in trust after May 26, 1969, for 

which a deduction was allowed under one of the sections 

listed in section 4947(a)(2).

A split-interest trust is subject to many of the same 

requirements and restrictions that are imposed on private 

foundations.

Dec 15, 2023 Cat. No. 13228E
The most common forms of a split-interest trust include 

the following.

Charitable lead trust. This is a split-interest trust that 

annually pays a fixed annuity or unitrust amount to a 

charitable organization for the lead period specified in the 

trust instrument. The lead period may be a term of years or it 

may be a period determined by the lifetime of one or more 

individuals, as described in Regulations sections 

1.170A-6(c), 20.2055-2(e)(2)(vi) and (vii), and 

25.2522(c)-3(c)(2)(vi) and (vii). The donor to the trust will 

have been allowed a deduction under one of the sections 

listed in section 4947(a)(2). At the end of the lead period, 

annual payments to the charitable organization cease, and 

the remaining corpus becomes payable, outright or in trust, to 

a noncharitable (private) beneficiary.

Charitable remainder annuity trust (CRAT). This is a 

split-interest trust described in section 664(d)(1). It pays a 

fixed dollar (annuity) amount, at least annually, to one or 

more recipients, at least one of which isn't a charitable 

organization. The annuity amount must be at least 5%, but 

cannot exceed 50%, of the initial net fair market value (FMV) 

of all property contributed to corpus, subject to the further 

requirement that the remainder interest in the trust (measured 

at the time property is transferred to the trust) must have a 

value of at least 10% of the FMV of the initial trust corpus. 

Payments to the recipient continue for a period of years. The 

period, if stated as a specific number, cannot exceed 20 

years. The period can also be determined by the lifespan of 

one or more recipients. Whether the period is a fixed number 

of years, or is measured by an individual’s lifespan, the value 

of the remainder interest must be at least 10% of the FMV of 

the property transferred to the trust (as explained above). 

Upon termination of the recipient’s entitlement to the annuity 

amount, the remainder interest is transferred to, or is used by, 

a charitable organization described in section 170(c), or 

qualified employer securities are transferred to an employee 

stock ownership plan.

Charitable remainder unitrust (CRUT). This is a 

split-interest trust described in section 664(d)(2). It is similar 

in many respects to a CRAT except that the amount payable 

to the recipient annually (the unitrust amount) is a fixed 

percentage (not less than 5% but not more than 50%) of the 

net FMV of the trust’s assets, subject further to the 

requirement described above that the remainder interest 

must have a value of at least 10% of the value of the initial 

trust corpus, determined at the time property is transferred to 

the trust. Because the unitrust amount is calculated annually 

based upon the FMV of trust corpus, and isn't a fixed amount 

determined upon the creation of the trust, the trustee must 

determine the FMV of the assets of the trust annually. Upon 

termination of the recipient’s entitlement to payments of the 

unitrust amount, the remainder interest is transferred to, or is 

used by, a charitable organization described in section 

170(c), or qualified employer securities are transferred to an 

employee stock ownership plan. The trust agreement for a 

CRUT may allow the trustee to distribute less than the full 

unitrust amount in years when the trust income (as defined 

under section 643(b)) is less than the unitrust amount. A 

Net-Income Makeup Charitable Remainder Unitrust 

(NIMCRUT) is a charitable remainder unitrust that allows 

payment of the unitrust amount to be deferred in years when 

the unitrust amount exceeds trust income, with the deferred 

distributions being made up in a later year when the trust has 

sufficient income. A Net Income Charitable Remainder 

Unitrust (NICRUT) is a charitable remainder unitrust that 

allows for deferral of the unitrust payment (as described 

above), but does not provide for deferred distributions to be 

made up in future years.

Note. The terms “section 664 trust” and “CRT” are general 

references to charitable remainder trusts. These terms 

include CRATs and CRUTs.

Pooled income fund. This is a split-interest trust described 

in section 642(c)(5), which is created and administered by a 

charitable organization described in section 170(b)(1)(A) 

(other than in clauses (vii) or (viii)). Donors to the fund 

receive a lifetime income interest, based upon the rate of 

return earned by the trust (or such other rate as may be 

prescribed for a trust in existence for less than 3 years). Upon 

the death of the donor and the termination of their income 

interest, the charitable organization becomes entitled to the 

portion of the trust corpus attributable to the donor’s 

contribution, free of trust.

Recipient. A recipient is a beneficiary who receives the 

possession or beneficial enjoyment of the unitrust or annuity 

amount.

Foundation manager. A foundation manager is an officer, 

director, or trustee (or an individual who has powers or 

responsibilities similar to those of officers, directors, or 

trustees). In the case of any act or failure to act, the term 

“foundation manager” may also include an employee of the 

trust who has the authority to act.

Disqualified person. A disqualified person is any of the 

following.

1. A substantial contributor.

2. A foundation manager.

3. A person who owns more than 20% of a corporation, 

partnership, trust, or unincorporated enterprise, which is itself 

a substantial contributor.

4. A member of the family of an individual in the first three 

categories.

5. A corporation, partnership, trust, or estate in which 

persons described in (1), (2), (3), or (4) above own a total 

beneficial interest of more than 35%.

6. For purposes of section 4943 (excess business 

holdings), a disqualified person also includes:

a. A private foundation which is effectively controlled 

(directly or indirectly) by the same persons who control 

the trust in question, or

b. A private foundation substantially all of the 

contributions to which were made (directly or indirectly) 

by the same person or persons described in (1), (2), or 

(3) above, or members of their families, within the 

meaning of section 4946(d), who made (directly or 

indirectly) substantially all of the contributions to the trust 

in question.

7. For purposes of section 4941 (self-dealing), a 

disqualified person also includes certain government 

officials. (See section 4946(c) and the related regulations.)

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Photographs of missing children selected by the Center may 

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(1-800-843-5678) if you recognize a child.

2 Instructions for Form 5227
Phone Help

If you have questions and/or need help completing this form, 

please call 877-829-5500. This toll-free telephone service is 

available Monday through Friday.

Additional Information

For additional information on private foundations and 

foundation managers, visit

IRS.gov/charities/non-profits/private foundations.

Other Forms You May Have To File

You may also be required to file one or more of the following 

forms.

• Form 56, Notice Concerning Fiduciary Relationship.

• Form 1041, U.S. Income Tax Return for Estates and Trusts.

• Form 1041-ES, Estimated Income Tax for Estates and 

Trusts.

• Form 4720, Return of Certain Excise Taxes Under 

Chapters 41 and 42 of the Internal Revenue Code.

• Form 8275, Disclosure Statement. Use this form to 

disclose items or positions (except those contrary to a 

regulation—see Form 8275-R, next) that aren't otherwise 

adequately disclosed on the tax return. The disclosure is 

made to avoid parts of the accuracy-related penalty for 

disregard of rules or substantial understatement of tax. Form 

8275 is also used for disclosures relating to preparer 

penalties for understatements due to unrealistic positions or 

for willful or reckless conduct.

• Form 8275-R, Regulation Disclosure Statement. Use this 

form to disclose any item on a tax return for which a position 

has been taken that is contrary to Treasury regulations.

• Form 8822-B, Change of Address or Responsible 

Party—Business.

• Form 8868, Application for Automatic Extension of Time To 

File an Exempt Organization Return or Excise Taxes Related 

to Employee Benefit Plans.

• Form 8870, Information Return for Transfers Associated 

With Certain Personal Benefit Contracts.

• Form 8886, Reportable Transaction Disclosure Statement.

Getting tax forms, instructions, and publications. Go 

to IRS.gov/Forms to download current and prior-year forms, 

instructions, and publications.

Ordering tax forms, instructions, and publications. 

Go to IRS.gov/OrderForms to order current forms, 

instructions, and publications; call 800-829-3676 to order 

prior-year forms and instructions. Your order should arrive 

within 10 business days.

Period To Be Covered by Return

File Form 5227 for each calendar year. This revision of the 

form is for the 2023 calendar year.

Accounting Methods

Trust income must be computed using the method of 

accounting regularly used in keeping the trust's books and 

records. Generally, permissible methods include the cash 

method, the accrual method, or any other method authorized 

by the Internal Revenue Code. The method used must clearly 

reflect income.

Unless otherwise allowed by law, the trust may not change 

the accounting method used to report income (for income as 

a whole or for any material item) without first getting consent 

on Form 3115, Application for Change in Accounting Method. 

See Pub. 538, Accounting Periods and Methods, for more 

details.

When To File

For calendar year 2023, file Form 5227 by April 15, 2024. In 

the case of a final short-year period, the return is due by the 

15th day of the 4th month following the date of the trust's 

termination.

Extension of time to file. Use Form 8868 to request an 

automatic extension of time to file. The request for an 

automatic extension must be filed by the due date of the 

return.

Where To File

Mandatory electronic filing. A filer required to file at least 

10 returns of any type during the calendar year ending with or 

within the tax year must file their returns electronically. 

“Returns” for purposes of these instructions include 

information returns (for example, Forms W-2 and Forms 

1099), income tax returns, employment tax returns (including 

quarterly Forms 941, Employer's Quarterly Federal Tax 

Return), and excise tax returns. The failure to file a return 

electronically when required is deemed a failure to file the 

return even if the filer submits a paper return.

Waivers and exemptions. On a year-by-year and 

form-by-form basis, the IRS may waive the requirement to file 

electronically in cases of undue hardship. In certain 

circumstances, a filer may be administratively exempt from 

the requirement to file electronically. The filer should keep 

documentation supporting their undue hardship or other 

applicable reason for not filing electronically in the filer's 

records. For more information about mandatory electronic 

filing, waivers, and exemptions, see Regulation section 

301.6011-13.

U.S. address. If you use the U.S. Postal Service, and are 

located in the United States, file Form 5227 at the following 

address:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0027

Outside the United States If you use a designated Private 

Delivery Service (or are located outside the United States in 

a foreign country or a U.S. territory), file Form 5227 at this 

address:

Internal Revenue Service Center

1973 Rulon White Blvd.

M/S 6054

Ogden, UT 84201

Private delivery services (PDSs). Tax-exempt 

organizations can use certain PDSs designated by the IRS to 

meet the “timely mailing as timely filing” rule for tax returns. 

Go to IRS.gov/PDS for the current list of designated services.

The PDS can tell you how to get written proof of the 

mailing date.

PDSs deliver to:

Internal Revenue Service Center

1973 Rulon White Blvd.

M/S 6054

Ogden, UT 84201

Instructions for Form 5227 3
PDSs can’t deliver items to P.O. boxes. You must use 

the U.S. Postal Service to mail any item to an IRS 

P.O. box address.

Penalty for Failure To File Timely, 

Completely, or Correctly

The failure-to-file penalty under section 6652(c)(2)(C) is 

imposed on a split-interest trust unless the failure is due to 

reasonable cause. The penalty is imposed on the trust for 

failure to:

• Timely file a return,

• File a complete return, or

• Furnish correct information.

The penalty is $20 for each day the failure continues with a 

maximum of $12,000 for any one return. However, if the trust 

has gross income greater than $302,000, the penalty is $120 

for each day the failure continues with a maximum of $60,000 

for any one return.

The IRS may make a written demand that the delinquent 

return be filed or information be furnished specifying a time to 

comply with the demand. If the trustee fails to comply with the 

demand by the specified date, the trustee will be charged a 

penalty of $10 for each day the failure continues with a 

maximum of $6,000 for any one return.

If the trustee required to file the return knowingly fails to file 

the return, the same penalty that is imposed on the trust will 

also be imposed on such trustee. Also, penalties for filing a 

false or fraudulent return apply.

Trust Instrument

When you file the first return for a charitable remainder 

annuity trust or unitrust, or charitable lead annuity or unitrust, 

include:

1. A copy of the trust instrument, and

2. A written declaration under penalties of perjury that it is 

a true and complete copy.

For sample forms of trusts that meet the requirements of a 

charitable remainder unitrust, see Rev. Procs. 2005-52 

through 2005-59, 2005-2 C.B. 326, 339, 353, 367, 383, 392, 

402, and 412.

For sample forms of trusts that meet the requirements of a 

charitable remainder annuity trust, see Rev. Procs. 2003-53 

through 2003-60, 2003-2 C.B. 230, 236, 242, 249, 257, 262, 

268, and 274.

For sample forms of trusts that meet the requirements of 

an inter vivos grantor or nongrantor charitable lead annuity 

trust, see Rev. Proc. 2007-45, 2007-29 I.R.B. 89. For a 

sample form of a trust that meets the requirements of a 

testamentary charitable lead annuity trust, see Rev. Proc. 

2007-46, 2007-29 I.R.B. 102, and Rev. Proc. 2016-42, 

2016-2 C.B. 269.

Rounding Off to Whole Dollars

You may round off cents to whole dollars on your return and 

attached statements. If you do round dollars, you must round 

all amounts. To round, drop amounts under 50 cents and 

increase amounts from 50 to 99 cents to the next dollar. For 

example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more amounts to figure the 

amount to enter on a line, include cents when adding the 

amounts and round off only the total.

CAUTION

!

Attachments

If you need more space, attach separate sheets showing the 

same information in the same order as on the printed form. 

Show the totals on the printed form.

Enter the trust's name and employer identification number 

on each sheet. Also, use sheets that are the same size as the 

forms and indicate clearly the line of the printed form to which 

the information relates.

Specific Instructions

Heading Items

Item A. Trust and trustee names and address

Complete the information called for in the name of the trust a 

exactly as it appears on Form SS-4, Application for Employer 

Identification Number. The name of the person or institution 

currently serving as trustee, should be entered in the lines 

below the name of the trust.

Include the suite, room, or other unit number after the 

street address. If the Post Office does not deliver mail to the 

street address and the trustee has a P.O. box, show the box 

number instead.

If you receive mail for the trust in care of a third party (such 

as an accountant or an attorney), enter on the street address 

line “C/O” followed by the third party's name and street 

address or P.O. box.

Item B. Employer Identification Number (EIN)

Every trust that completes this return must have an EIN. You 

can use one of the following methods to apply for an EIN.

• Online—Go to IRS.gov/EIN. The EIN is issued immediately 

once the application information is validated.

• By mailing or faxing Form SS-4.

Note. The online application process isn't yet available for 

trusts with addresses in foreign countries.

Item C. Type of Entity

Check the appropriate box to indicate the type of trust. See 

Definitions in the General Instructions, earlier, for detailed 

descriptions of the types of split-interest trusts that file Form 

5227.

Item D. Fair Market Value (FMV) of Assets

Enter the FMV of trust assets at the end of the tax year.

Item E. Gross Income

Enter the trust's gross income for the tax year. Gross income 

is all income from whatever source derived, including:

• Interest,

• Dividends,

• Rents (such as the amount on line 3 of Schedule E (Form 

1040)),

• Royalties (such as the amount on line 4 of Schedule E 

(Form 1040)),

• Gross income derived from business (such as the amount 

on line 7 of Schedule C (Form 1040)), and

• Gains (not losses) derived from dealings in property 

(figured on each transaction).

4 Instructions for Form 5227
Item F. Initial Return, Final Return, Amended 

Return; or Change of Name or Address

Initial return. Check this box if this is the initial return for the 

split-interest trust. Charitable remainder trusts must also 

complete Part IX, line 13 and attach a copy of the trust 

instrument.

Final return. Check this box if this is a final return because 

the trust has terminated. If the trust or a recipient's interest in 

the trust has terminated, check the “Final K-1” box at the top 

of the Schedule K-1 (Form 1041).

For charitable remainder trusts. If you check the final 

return box, be sure to answer the questions for Part IX, lines 

15a-c and complete Part III, line 3 if you answered “Yes” to 

Part IX, line 15b.

Amended return. If you are filing an amended 2023 Form 

5227, check the “Amended return” box. Complete the entire 

return and correct the appropriate lines with the new 

information. On an attachment, explain the reason for the 

changes and identify the lines and amounts being changed.

For charitable remainder trusts. If the amended return 

results in a change to income, or a change in distribution of 

any income or other information provided to a recipient, an 

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

amended Form 5227 and a copy given to each recipient. 

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

(Form 1041).

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

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

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

address), check the appropriate box(es).

If the address shown on Form 5227 changes after you file 

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

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

Item G. Date Trust Created

Enter the date the trust was created. This is generally the 

date the trustee first received property to administer under 

the terms of the trust document.

Part I. Income and Deductions

Section A—Ordinary Income

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

Line 1. Interest income. Report all taxable interest income 

that was received by the trust. Examples of taxable interest 

include interest from:

• Accounts (including certificates of deposit and money 

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

• Notes, loans, and mortgages;

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

• U.S. savings bonds;

• Original issue discount; and

• Income received as a regular interest holder of a real 

estate mortgage investment conduit (REMIC).

For taxable bonds acquired after December 31, 1987, 

amortizable bond premium is treated as an offset to the 

interest income instead of as a separate interest deduction. 

See Pub. 550, Investment Income and Expenses.

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

all ordinary dividends, including the qualified dividends 

reported on line 2b.

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

qualified dividends received by the trust. In general, a 

qualified dividend is a dividend received during the tax year 

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

corporation. A qualified dividend does not include any 

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

exempt from income tax under section 501 or 521 for the 

corporation's current or preceding tax year during which the 

distribution was made.

Generally, these dividends are reported to the trust in 

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

Qualified dividends are treated as a separate class of 

ordinary income for purposes of ordering distributions. See 

Ordering Rules for Ordinary Income, later, for more 

information on distributions. See Pub. 550 for additional 

information on qualified dividends, including holding period 

requirements.

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

business, report the income and expenses on Schedule C 

(Form 1040), Profit or Loss From Business. Enter the net 

profit or loss from Schedule C on line 3. (Section 664 trusts, 

see Part VIII, Line 7, later).

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

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

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

rents, royalties, partnerships, S corporations, other estates 

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

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

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

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

flow-through entity, use the corresponding lines on Form 

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

the flow-through entity. (Section 664 trusts, see Part VIII, 

Line 7, later).

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

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

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

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

Line 7, later).

Note. If the trust has farm rental income and expenses 

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

income and expenses on Schedule E (Form 1040) and 

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

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

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

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

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

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

exchange of property (other than capital assets) and also 

from involuntary conversions (other than casualty or theft). 

For more information, see the Instructions for Form 4797.

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

that is includible in gross income but not included on lines 1 

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

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

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

Section B—Capital Gains (Losses)

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

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

Sales and Other Dispositions of Capital Assets. Lines 15 and 

Instructions for Form 5227 5
16 of Schedule D (Form 1041) applies only to a charitable 

remainder trust (section 664 trust).

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

lines 1a through 5 and line 7 of the 2023 Schedule D (Form 

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

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

1041) on line 9.

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

lines 8a through 14 and line 16 of the 2023 Schedule D (Form 

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

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

1041) on line 10.

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

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

following is a summary of the classes.

• 28% long-term capital gain class. This class consists of 

collectibles gains and losses and the taxable gain (but not 

more than the section 1202 exclusion) on the sale or 

exchange of qualified small business stock. Enter these 

gains or losses on line 12.

• Section 1250 long-term capital gain class. This class 

consists of unrecaptured section 1250 gain (generally the 

part of real estate capital gain attributable to depreciation) on 

sales, exchanges, etc., of assets held more than 1 year. 

Undistributed, unrecaptured section 1250 gain on sales, 

exchanges, etc., after May 6, 1997, is included in this class. 

Enter this gain on line 11.

• All other long-term capital gain class. This class 

consists of all other gains or losses from sales, exchanges, 

and conversions (including installment payments received) of 

assets held more than 12 months.

Section C—Nontaxable Income

In this section, include other income that isn't included in 

Section A or B. This section includes income excluded under 

Subtitle A, Chapter 1, Subchapter B, Part III, of the Internal 

Revenue Code, such as interest on state and municipal 

bonds.

Section D—Deductions

For Section 664 Trusts

Include all allowable deductions and any expense that would 

be allowable but for the fact that it must be allocated to 

tax-exempt income. No deduction is ever allowed for:

• The personal exemption under section 151 (see section 

642(b)),

• Charitable contributions under section 170(a) (see section 

642(c)),

• Net operating losses under section 642(d),

• Income distribution deductions under section 661,

• Capital loss carryforwards under section 1212,

• Federal income taxes, or

• Federal excise taxes under chapter 42.

Any expense that isn't deductible in determining taxable 

income (or not otherwise deductible but for the fact that it 

must be allocated to nontaxable income) must be allocated 

to corpus.

For Split-Interest Trusts Other Than Section 664 

Trusts

Include all expenses attributable to gross income that are 

deductible for the tax year.

Line 21. Attached statement. List any other deductible 

expense that is attributable to the gross income of the trust 

and isn't included on lines 17 through 20 and line 23 and 

show the amount of the deduction. Total the amounts listed 

and enter the total on line 21.

Line 23. Charitable Deduction

Enter the amount of any charitable deduction or other 

deduction taken under section 642(c) for the tax year.

Section E—Deductions Allocable to Income 

Categories (Section 664 trust only)

Deductions are allocated as follows.

1. Allowable deductions directly attributable to one or 

more classes of income items (that is, interest, dividends, or 

rents) or corpus are allocated to such income classes or 

corpus.

2. Allowable deductions not allocated under (1) above 

are allocated on the basis of gross income after directly 

attributable deductions, to the extent of such income.

3. Deductions not allocated under either (1) or (2) above 

may be allocated in any manner.

Add the deductions that were allocated to all the classes 

of income items within each category and enter the amount 

on the appropriate line. (Note. Any deduction allocated to 

corpus isn't shown on any line in Section E.)

For a discussion of the allocation of deductions to 

tax-exempt income, see Allocation of Deductions for 

Tax-Exempt Income in the Instructions for Form 1041.

Part II. Schedule of Distributable 

Income (Section 664 trust only)

Report the income (both current and cumulative undistributed 

income) of the trust for purposes of determining the character 

of distributions in three categories.

1. Ordinary income.

2. Capital gains and losses.

3. Nontaxable income.

A loss in any one of the three categories may not be used 

to reduce a gain in any other category. For example, a capital 

loss may not be used to reduce ordinary income. However, a 

loss in any one category may be used to reduce 

undistributed gain for earlier years within that same category, 

and any excess may be carried forward to reduce gain in 

future years within that same category.

For information on recordkeeping for long-term capital 

gains or ordinary income, see the Capital Gains Distribution 

Worksheet or the Ordinary Income Distribution Worksheet, 

later.

Net investment income (NII). Beginning in 2013, 

charitable remainder trusts must begin tracking Excluded 

Income and NII received and distributed. For 2013 and later 

years, columns (a), (b), and (c) of Part II, line 1, have been 

divided into NII and Excluded Income.

The term “Excluded Income” is income received (or losses 

incurred) by the charitable remainder trust not taken into 

account in computing NII. For charitable remainder trusts 

(CRTs) in existence before 2013, all undistributed income as 

of the end of 2012 is Excluded Income. For 2013 and later 

years, the CRT must determine whether the items of income, 

6 Instructions for Form 5227
gain, loss, and deduction reported on sections A through D of 

Part I constitute NII or Excluded Income.

Line 1. Enter the amounts of undistributed Excluded Income 

and undistributed accumulated NII from post-2012 tax years.

Line 2. Allocate the items of income or loss from the current 

year between Excluded Income and NII.

The allocation of items of income or loss from the 

current year between Excluded Income and NII 

should be reported on line 2 after the application of 

the gain and loss netting rules outlined in Part III of 

Schedule A, later. In certain situations, NII losses may reduce 

Excluded Income due to the netting rules. Therefore, those 

rules should be applied before entering amounts on line 2.

Note. If the CRT elects to use the Simplified Net Investment 

Income Calculation, then report all income or loss from Part I 

in the Excluded Income column and leave the NII column 

empty. See the instructions for the Simplified Net Investment 

Income Calculation Election in Part II of Schedule A, later.

Part III. Distributions for Charitable 

Purposes

Section A—Distributions of Principal

Line 2. Provide the information requested for columns A 

through C and enter the amount on the line to the right. In 

column C, list in sufficient detail each class of activity for 

amounts paid out of principal to the same payee for 

charitable purposes.

Examples. “Cash payments to buy library material” or 

“Grant, paid in cash, to equip the chemistry lab at Magnolia 

University.”

Don't merely enter the category (that is, religious, 

charitable, scientific, literary, or educational). The purpose of 

the deduction must be entered as shown in the examples 

above.

Section B—Accumulated Income Set Aside and 

Income Distributions for Charitable Purposes

Complete Section B of Part III if any of the following apply.

• The trust claimed a deduction in a prior year under section 

642(c) for an amount permanently set aside and at the 

beginning of the year the set aside amount was not fully 

distributed.

• The trust claimed a deduction during the year under 

section 642(c) whether the amount was set-aside or paid.

• The trust made payment for charitable purposes during the 

year but claimed the section 642(c) deduction in the prior 

year.

• The trust is treated as a grantor trust and made a payment 

for charitable purposes during the year, and the grantor 

(during the year or a prior year) claimed a charitable 

deduction as described in Regulations section 1.170A-6(c) 

upon contribution to the trust.

Note. The grantor trust completes only lines 7, 8, and 9 for 

this part.

Line 7. Provide the information requested for columns A 

through C and enter the amount on the line to the right. In 

column C, list in sufficient detail each class of activity to the 

same payee for charitable purposes for amounts distributed 

in which a section 642(c) deduction was claimed.

CAUTION

!

Don't merely enter the category (that is, religious, 

charitable, scientific, literary, or educational). The purpose of 

the deduction must be entered as shown in the examples in 

Section A.

Part IV. Balance Sheet

Complete the balance sheet using the accounting method 

the trust uses in keeping its books and records. All filers must 

complete columns (a) and (b). Also, all charitable remainder 

unitrusts must complete column (c). A charitable lead unitrust 

may, but isn't required to, show the FMV of its assets in 

column (c).

Enter the end-of-year book value where space is provided 

to the left of column (a) to report receivables and the related 

allowance for doubtful accounts or depreciable assets and 

accumulated depreciation. Enter the net amounts in column 

(b).

Column (c)

In computing the net FMV of the unitrust's assets, take into 

account all assets and liabilities without regard to whether 

particular items are taken into account in determining the 

income of the trust. The net FMV of the trust's assets may be 

determined on any one date during the tax year of the trust, 

or by taking the average of valuations made on more than 

one date during the tax year of the trust, as long as the same 

valuation date or dates and valuation methods are used each 

year. See Regulations section 1.664-3.

Line 1. Cash—non-interest-bearing. Enter the amount of 

cash on deposit in checking accounts, deposits in transit, 

change funds, petty cash funds, or any other 

non-interest-bearing account. Don't include advances to 

employees or officers or refundable deposits paid to 

suppliers or others.

Line 2. Savings and temporary cash investments. Enter 

the total of cash in savings or other interest-bearing accounts 

and temporary cash investments, such as money market 

funds, commercial paper, certificates of deposit, U.S. 

Treasury bills, or other governmental obligations that mature 

in less than 1 year.

Line 3. Accounts receivable. Enter the total accounts 

receivable (reduced by the corresponding allowance for 

doubtful accounts) that arose from the sale of goods and/or 

the performance of services. Claims against vendors or 

refundable deposits with suppliers or others may be reported 

here if not significant in amount. (Otherwise, report them on 

line 12.) Any receivables due from officers, directors, 

trustees, foundation managers, or other disqualified persons 

must be reported on line 4. Receivables (including loans and 

advances) due from other employees should be reported on 

line 12.

Line 4. Receivables due from officers, directors, trustees, and other disqualified persons. Enter here (and in 

an attached statement described below) all receivables due 

from officers, directors, trustees, and other disqualified 

persons and all secured and unsecured loans (including 

advances) to such persons.

Attached statement. 

1. In the required statement, report each loan separately, 

even if more than one loan was made to the same person, or 

the same terms apply to all loans made.

Instructions for Form 5227 7
Salary advances and other advances for personal use and 

benefit, and receivables subject to special terms or arising 

from transactions not functionally related to the trust's 

charitable purposes must be reported as separate loans for 

each officer, director, etc.

2. Receivables that are subject to the same terms and 

conditions (including credit limits and rate of interest) as 

receivables due from the general public and that arose in 

connection with an activity functionally related to the trust's 

charitable purposes may be reported as a single total for all 

the officers, directors, etc. Travel advances made in 

connection with official business of the trust may also be 

reported as a single total.

For each outstanding loan or other receivable that must be 

reported separately, the attached statement should use a 

columnar format and show the following information:

• Borrower's name and title,

• Original amount,

• Balance due,

• Date of note,

• Maturity date,

• Repayment terms,

• Interest rate,

• Security provided by the borrower,

• Purpose of the loan, and

• Description and FMV of the consideration furnished by the 

lender.

The above detail isn't required for receivables or travel 

advances that may be reported as a single total (see 

instruction (2) above). However, report and identify those 

totals separately in the attachment.

Line 5. Other notes and loans receivable. Enter the 

combined total of notes receivable and net loans receivable.

Notes receivable. Enter the amount of all notes 

receivable not listed on line 4 and not acquired as 

investments. Attach a statement similar to that called for in 

the line 4 instructions. The statement should also identify the 

relationship of the borrower to any officer, director, trustee, or 

other disqualified person.

For a note receivable from any section 501(c)(3) 

organization, list only the name of the borrower and the 

balance due on the required statement.

Loans receivable. Enter the gross amount of loans 

receivable, less the allowance for doubtful accounts, arising 

from the normal activities of the trust. An itemized list of these 

loans isn't required, but attach a statement indicating the total 

amount of each type of loan outstanding. Report loans to 

officers, directors, trustees, or other disqualified persons on 

line 4, and loans to other employees on line 12.

Line 6. Inventories for sale or use. Enter the amount of 

materials, goods, and supplies purchased or manufactured 

by the trust and held for sale or use in some future period.

Line 7. Prepaid expenses and deferred charges. Enter 

the amount of short-term and long-term prepayments of 

future expenses attributable to one or more future accounting 

periods. Examples include prepayments of rent, insurance, 

and pension costs, and expenses incurred in connection with 

a solicitation campaign to be conducted in a future 

accounting period.

Lines 8a, b, and c. Investments—U.S. and state government obligations, corporate stock, and corporate 

bonds. Enter the book value (which may be market value) of 

these investments. Attach a statement that lists each security 

held at the end of the year and shows whether the security is 

listed at cost (including the value recorded at the time of 

receipt in the case of donated securities) or end-of-year 

market value. Don't include amounts shown on line 2. 

Governmental obligations reported on line 8a are those that 

mature in 1 year or more. Debt securities of the U.S. 

Government may be reported as a single total rather than 

itemized. Obligations of state and municipal governments 

may also be reported as a lump-sum total. Don't combine 

U.S. Government obligations with state and municipal 

obligations on the attached statement.

Line 9. Investments—Land, buildings, and equipment. 

Enter the book value (cost or other basis less accumulated 

depreciation) of all land, buildings, and equipment held for 

investment purposes, such as rental properties. Attach a 

statement listing these investment fixed assets held at the 

end of the year and showing, for each item or category listed, 

the cost or other basis, accumulated depreciation, and book 

value.

Line 10. Investments—Other. Enter the amount of all other 

investment holdings not reported on line 8 or line 9. Attach a 

statement describing each of these investments held at the 

end of the year. Show the book value for each and indicate 

whether the investment is listed at cost or end-of-year market 

value. Don't include program-related investments. See the 

instructions for line 12.

Line 11. Land, buildings, and equipment. Enter the book 

value (cost or other basis less accumulated depreciation) of 

all land, buildings, and equipment owned by the trust and not 

held for investment. This includes any equipment owned and 

used by the trust in conducting its charitable activities. Attach 

a statement listing these fixed assets held at the end of the 

year and showing for each item or category listed, the cost or 

other basis, accumulated depreciation, and book value.

Line 12. Other assets. List and show the book value of 

each category of assets not reportable on lines 1 through 11. 

Attach a separate statement if more space is needed.

One type of asset reportable on line 12 is program-related 

investments made primarily to accomplish a charitable 

purpose of the trust rather than to produce income.

Line 13. Total assets. Columns (a) and (b) (and column (c) 

if a unitrust) must always have an entry, even if it is zero.

Line 14. Accounts payable and accrued expenses. Enter 

the total accounts payable to suppliers and others, and 

accrued expenses such as salaries payable, accrued payroll 

taxes, and interest payable.

Line 15. Deferred revenue. Include revenue that the 

organization has received but not yet earned as of the 

balance sheet date under its method of accounting.

Line 16. Loans from officers, directors, trustees, and 

other disqualified persons. Enter the unpaid balance of 

loans received from officers, directors, trustees, and other 

disqualified persons. For loans outstanding at the end of the 

year, attach a statement that provides (for each loan) the 

name and title of the lender and the information specified in 

the line 4 instructions.

Line 17. Mortgages and other notes payable. Enter the 

amount of mortgages and other notes payable at the 

beginning and end of the year. Attach a statement showing, 

as of the end of the year, the total amount of all mortgages 

payable and, for each nonmortgage note payable, the name 

of the lender and the other information specified in the line 4 

8 Instructions for Form 5227
instructions. The statement should also identify the 

relationship of the lender to any officer, director, trustee, or 

other disqualified person.

Line 18. Other liabilities. List and show the amount of each 

liability not reportable on lines 14 through 17. Attach a 

separate statement if more space is needed.

Charitable remainder unitrusts must include any unitrust 

amounts applicable to prior periods that are unpaid but 

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

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

don't include any make-up amount for a NIMCRUT.

Line 19. Total liabilities. Columns (a) and (b) (and column 

(c) if a unitrust) must always have an entry, even if it is zero.

Line 23. Total liabilities and net assets. Columns (a) and 

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

Part V. Charitable Remainder Annuity 

Trust Information

Line 1b. To figure the total annual annuity amounts for a 

short tax year, see Short tax years, later.

Part VI. Charitable Remainder 

Unitrust Information

Line 4a. Enter the unitrust fixed percentage (which may not 

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

If there is more than one unitrust recipient, attach a 

statement showing the percentage of the total unitrust dollar 

amount payable to each recipient. The sum of these 

individual shares should be 100%.

Line 4b. This line must always have an entry, even if it is 

zero.

Line 5a. Enter the trust's 2023 (fiduciary) accounting income 

determined under the terms of the governing instrument and 

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

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

information.

Line 6a. Enter the amount, if any, from line 69 of the 2022 

Form 5227.

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

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

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

deficiencies from previous years as follows.

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

previous year.

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

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

income that was distributed for previous years.

Line 8. Use this amount to determine future accrued 

accumulated distribution deficiencies.

Short tax years. To figure the annuity amount (Part V, 

line 1b) or the unitrust amount (Part VI, line 7) for short tax 

years, multiply the annuity or unitrust amount by the number 

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

365 (or 366 for leap years).

For a unitrust whose governing instrument provides for an 

income exception, if no valuation date occurs before the end 

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

day of the trust's tax year.

Part VII. Statements Regarding 

Activities

Answer every question in this section. If a line does not apply, 

enter “N/A.”

Line 1. A split-interest trust must have a governing 

instrument that requires the trust to act or refrain from acting 

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

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

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

by express language in its governing instrument or 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 claims it satisfies the 

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

provisions of state law must effectively impose the 

requirements of section 508(e) on the trust.

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

instrument which contains mandatory directions conflicting 

with any of its requirements and the trust has such mandatory 

directions in its governing instrument, then the trust has not 

satisfied the requirements of section 508(e) by the operation 

of that state law.

Part VIII. Statements Regarding 

Activities for Which Form 4720 May 

Be Required

Complete Part VIII to determine whether the trust has 

complied with the applicable chapter 42 rules relating to 

private foundations and whether the trust, trustee, 

disqualified persons, or some combination of these may be 

liable for certain foundation excise taxes. These excise taxes 

include:

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

“disqualified persons,”

• The section 4943 tax on excess business holdings,

• The section 4944 tax on investments that jeopardize the 

trust's charitable purposes, and

• The section 4945 tax on taxable expenditures.

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

a detailed explanation of each of these taxes, see the 

Instructions for Form 4720.

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

amounts:

1. Payable under the terms of the trust to income 

beneficiaries, unless a deduction was allowed under section 

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

2. In trust for which a charitable contribution deduction 

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

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

a deduction was allowable; or

3. Transferred in trust before May 27, 1969.

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

considered self-dealing under section 4941 unless one of the 

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

applies. You may also access information about self-dealing 

at IRS.gov/charities/foundations/index.html by clicking on the 

link for Life Cycle of a Private Foundation.

The terms “disqualified person” and “foundation manager” 

are defined under Definitions, earlier.

Instructions for Form 5227 9
Line 1b. If you answered “Yes” to any of the questions in 

line 1a, you should answer “Yes” to line 1b unless all of the 

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

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

appear in Notices published in the Internal Revenue Bulletin, 

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

print, there were no Notices currently in effect relating to 

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

Line 2. Under section 4947(b)(3)(A), a split-interest trust 

isn't subject to the excess business holdings tax (section 

4943) or tax on investments that jeopardize the trust's 

charitable purpose (section 4944) if all the income interest 

(and none of the remainder interest) of the trust is devoted 

solely to one or more of the charitable purposes described in 

section 170(c)(2)(B). In addition, all amounts in the trust for 

which a charitable contribution deduction was allowed under 

section 170 (for individual taxpayers) or a similar section for 

personal holding companies, foreign personal holding 

companies, or estates or trusts (including a deduction for 

estate or gift tax purposes) cannot have a total value of more 

than 60% of the total FMV of all amounts in the trust. For the 

purposes of section 4947(b)(3)(A), the term “income interest” 

includes the right to receive an annuity or unitrust payment, 

as described in Regulations section 53.4947-2(b)(2)(i).

Under section 4947(b)(3)(B), a split-interest trust isn't 

subject to the section 4943 or 4944 taxes if a deduction was 

allowed under section 170 (and related provisions for other 

entities) for amounts payable under the terms of the trust to 

every remainder beneficiary but not to any income 

beneficiary. For the purposes of section 4947(b)(3)(B), the 

term “income beneficiary” includes the recipient entitled to 

receive an annuity or unitrust payment under a CRT, as well 

as the donor entitled to payments from a pooled income fund. 

The term “remainder beneficiary” includes the charitable 

organization entitled to the remainder interest under a CRT or 

a pooled income fund.

Line 3. In general, excess business holdings are the amount 

of stock or other interest in a business enterprise that the 

trust must dispose of to a person other than a disqualified 

person in order for the trust's remaining holdings in the 

enterprise to be permitted holdings.

In general, the combined permitted holdings of a trust and 

all disqualified persons may not be more than 20% of the 

voting power (or beneficial or profits interest, in the case of a 

trust or a partnership) in any business enterprise.

In general, a business enterprise means the active 

conduct of a trade or business, including any activity that is 

regularly conducted to produce income from selling goods or 

performing services that is an unrelated trade or business 

under section 513.

The term “business enterprise” does not include:

1. A functionally related business, defined in section 

4942(j)(4); or

2. A trade or business if at least 95% of its gross income 

is derived from passive sources.

See section 4943(d)(3)(B) for additional items that are 

included in gross income from passive sources.

Line 3a. A private foundation isn't treated as having excess 

business holdings in any enterprise if, together with related 

foundations, it owns 2% or less of the voting stock and 2% or 

less in value of all outstanding shares of all classes of stock. 

A similar exception applies to a beneficial or profits interest in 

any business enterprise that is a trust or partnership.

Line 4. In general, an investment which jeopardizes any of 

the charitable purposes of a trust is one in which a foundation 

manager did not exercise ordinary business care in making 

the investment to provide for the long- and short-term 

financial needs of the trust in carrying out its charitable 

purposes.

For more information on investments that jeopardize 

charitable purposes, see Regulations section 53.4944-1.

Line 5. Grants by a trust to a public charity aren't taxable 

expenditures if the grants aren't earmarked for use for any of 

the activities described on lines 5a(1) through (5) and there is 

no oral or written agreement by which the trust may cause the 

public charity to engage in any such prohibited activity or to 

select the grant grantee.

Grants made to exempt operating foundations (as defined 

in section 4940(d)(2)) aren't subject to the expenditure 

responsibility provisions of section 4945. If the trust made 

grants to such organizations, you don't have to file Form 4720 

for those grants. See the section 4945 regulations for more 

information.

Line 5b. If you answered “Yes” to any of the questions in 

line 5a, you should answer “Yes” to line 5b unless all of the 

transactions engaged in were “excepted” transactions. 

Excepted transactions are described in Regulations section 

53.4945 or appear in Notices published in the Internal 

Revenue Bulletin, relating to disaster assistance. At the time 

this form went to print, there were no Notices currently in 

effect relating to disaster assistance for “excepted” 

transactions to taxable expenditures.

Line 6a. A personal benefit contract is, in general, any life 

insurance, annuity, or endowment contract that benefits, 

directly or indirectly, a transferor, a transferor's family 

member, or a transferor designee that isn't an organization 

described in section 170(c).

Line 6b. Enter the total of all premiums paid by the 

split-interest trust on any personal benefit contract if the 

payment of premiums is in connection with a transfer for 

which a deduction isn't allowed under section 170(f)(10)(A). 

Also, if there is an understanding or expectation that any 

person will directly or indirectly pay any premium on a 

personal benefit contract for the transferor, include those 

premium payments in the amount entered on this line. For 

more information, see the instructions for Form 8870.

Line 7. If a charitable remainder trust has any unrelated 

business taxable income (within the meaning of section 512 

and related regulations) for 2023, the trust is liable for a tax 

under section 664(c)(2), which is treated as a Chapter 42 

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

amount of the trust's unrelated business taxable income. If 

the trust has any unrelated business taxable income, answer 

“Yes” and file Form 4720, in addition to Form 5227, to report 

the trust's unrelated business taxable income and the tax 

due.

Part IX. Questionnaire for Charitable 

Lead Trusts, Pooled Income Funds, 

and Charitable Remainder Trusts

Section A—All Trusts

All trusts are required to answer lines 1 and 2.

10 Instructions for Form 5227
Section B—Charitable Lead Trusts

Line 3. The information on this line is used to determine 

whether sections 4943 and 4944 apply for 2023.

Line 5. Enter the amount for payments described in sections 

170(f)(2)(B), 2055(e)(2)(B), and 2522(c)(2)(B).

Section C—Pooled Income Funds

Line 7. Upon termination of the income interest retained or 

created by a donor, the trustee is required to sever from the 

fund an amount equal to the value of the remainder interest in 

the property upon which the income interest is based. The 

amount severed from the fund must either be paid to, or 

retained for the use of, the designated public charity, as 

provided in the governing instrument. See Regulations 

section 1.642(c)-5(b)(8) for valuation procedures.

Section D—Charitable Remainder Trusts

Line 11. If a charitable remainder annuity trust or certain 

charitable remainder unitrusts pay the annuity or unitrust 

amount after the close of the tax year, and:

1. The payment is made within a reasonable time after 

the close of the tax year; and

2. To the extent the payment is characterized as corpus 

from a property distribution (other than cash), the trustee 

treats any income generated by the distribution as occurring 

on the last day of the tax year for which the annuity or unitrust 

amount is due, then the annuity trust or certain unitrusts won't 

be deemed to have:

• Engaged in self-dealing (section 4941),

• Unrelated debt-financed income (section 514),

• Received an additional contribution (Regulations sections 

1.664-2(b) and 1.664-3(b)), or

• Failed to function exclusively as a charitable remainder 

trust (Regulations section 1.664-1(a)(4)).

See Regulations sections 1.664-2(a)(1) and 1.664-3(a)(1) 

for more information.

Under Regulations section 1.664-1(d)(5), a distribution of 

property (other than cash) is treated as a sale by the trust.

Note. You must report income (gain) generated by the 

property distribution (discussed above) on Part I of Form 

5227 for the current tax year.

Trusts created before December 10, 1998. The election in 

Regulations sections 1.664-2(a)(1)(i)(a)(2) and 1.664-3(a)(1)

(i)(g)(2) does not apply to charitable remainder annuity trusts 

and certain charitable remainder unitrusts whose annuity or 

unitrust amount is 15% or less.

Line 12. Net investment income tax (NIIT)—Regulations 

section 1.1411-10(g) election. In general, a CRT that owns 

stock of a controlled foreign corporation (CFC) (within the 

meaning of section 953(c)(1)(B) or 957(a)) or a passive 

foreign investment company (PFICs)(within the meaning of 

section 1297(a)) that it treats as a qualified electing fund 

(QEF) under section 1295 may make the election provided in 

Regulations section 1.1411-10(g). For NIIT purposes, if an 

election is in effect with respect to a CFC or QEF, then, in 

general, the amounts included in income for regular tax 

purposes under section 951 and section 1293 from the CFC 

or QEF are also included in NII, and distributions of 

previously taxed income to the CRT from the CFC or QEF 

described in section 959(d) or 1293(c) are excluded from NII.

This election must be made on an entity-by-entity basis, 

and applies only to the particular CFCs and QEFs for which 

an election is made. If the CRT owns a CFC or QEF through 

certain domestic pass-through entities, such as a domestic 

partnership or common trust fund, the domestic pass-through 

entity may make the election with respect to the CFC or QEF 

and you will be considered as having made the election. If the 

entity does not make the election, you may make the election 

with respect to the CFC or QEF owned through the entity.

When to make the election. The election applies to the tax 

year for which it is made and later tax years, and applies to all 

interests in the CFC or QEF that the CRT later acquires. The 

CRT cannot revoke the election. The election must be made 

no later than the first tax year beginning after December 31, 

2013, in which the CRT includes an amount in income for 

regular tax purposes under section 951(a) or 1293(a) with 

respect to the CFC or QEF. The election may be made on an 

original or an amended return, provided that the tax year for 

which the election is made, and all tax years affected by the 

election, aren't closed by the period of limitations on 

assessments under section 6501. For more information, see 

Regulations section 1.1411-10(g).

Note. CRTs that make the Simplified Net Investment Income 

Calculation Election may also make the Regulations section 

1.1411-10(g) election. See Part II of Schedule A, later.

For more information on the NII treatment of income from 

certain CFCs and PFICs within the section 664 category and 

class system, see Regulations section 1.1411-10 and 

Proposed Regulations section 1.1411-3(d)(2)(ii).

Contents of the election. In order to make the election, the 

CRT must check the “Yes” box on line 12 and must attach a 

statement to its Form 5227, which must include:

• Name of the CRT and its EIN;

• A declaration that the CRTs elect under Regulations 

section 1.1411-10(g) to apply the rules in Regulations section 

1.1411-10(g) to the CFCs and QEFs identified in the 

statement; and

• The following information with respect to each CFC and 

QEF for which an election is made:

• The name of the CFC or QEF; and

• Either the EIN of the CFC or QEF, or, if the CFC or QEF 

does not have an EIN, the reference ID number of the CFC or 

QEF.

Line 16. Check the “Yes” box and enter the name of the 

foreign country if either (1) or (2) below applies.

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

corporation that owns one or more foreign bank accounts.

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

or signature or other authority over a bank, securities, or 

other financial account in a foreign country.

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

the trust.

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

during the whole year.

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

operated by a U.S. financial institution.

See FinCEN Form 114, Report of Foreign Bank and 

Financial Accounts (FBAR), and its instructions to determine 

whether the trust is considered to have an interest in or 

signature or other authority over a bank, securities, or other 

financial account in a foreign country. If “Yes,” electronically 

file FinCEN Form 114 with the Department of the Treasury 

Instructions for Form 5227 11
using the FinCEN's BSA E-Filing System. Because FinCEN 

Form 114 isn't a tax form, don't file it with Form 5227. See 

Fincen.gov for more information.

If you are required to file FinCEN Form 114 but don't, 

you may have to pay a penalty of up to $10,000 

(more in some cases).

Signature

Form 5227 must be signed by the trustee or by an authorized 

representative.

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

in Form 5227, the Paid Preparer Use Only space should 

remain blank. If someone prepares this return without charge, 

that person should not sign the return.

Paid preparer. Generally, anyone who is paid to prepare a 

tax return for a charitable remainder trust must sign the return 

and fill in the other blanks in the Paid Preparer Use Only area 

of the return. For all other trusts, completion of Form 5227's 

Paid Preparer Use Only area is optional.

If you have questions about whether a preparer is required 

to sign the return, please contact an IRS office.

The person required to sign the return as the preparer 

must:

• Complete the required preparer information,

• Sign it in the space provided for the preparer's signature (a 

facsimile signature is acceptable), and

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

to be filed with the IRS.

Enter the paid preparer’s PTIN, not their social 

security number (SSN), in the “PTIN” box in the paid 

preparer’s block. Because Form 5227 is publicly 

disclosable, any information entered in this block will become 

public. For more information about PTINs, visit the IRS 

website at IRS.gov/PTIN.

Schedule A—Distributions, Assets, 

and Donor Information

Note. Schedule A isn't open to public inspection.

Qualified Business Income Deduction

A CRT is not entitled to a qualified business income (QBI) 

deduction. However, a taxable recipient of a unitrust or 

annuity amount from a CRT may take into account QBI, 

qualified REIT dividends, and qualified PTP income received 

from a CRT to the extent that the unitrust or annuity amount 

distributed consists of such items. For additional information 

on how to report QBI and other section 199A items to 

beneficiaries/recipients, see the instructions for Schedule K-1 

that are found in the Instructions for Form 1041.

Part I. Accumulation Schedule (Section 664 

trust only)

The following information applies to lines 2a and 2b.

Line 2a. Enter the total of all distributions for 2023 on the 

short line to the immediate right of the “2023.”

Line 2b. Enter the amount distributed from each income 

category.

CAUTION

!

CAUTION

!

Part II. Simplified Net Investment Income 

Calculation Election (SNIIC Election) (Section 

664 trust only)

The CRT may make an election to calculate receipts and 

distributions of NII using a simplified method that is 

independent of the section 664 category and class system. 

Once made, the SNIIC election is irrevocable. If a CRT 

makes the SNIIC election, the CRT computes the NII in the 

same manner as an individual. When using the SNIIC, a 

CRT’s accumulated NII is a separate and independent 

tracking system within the CRT and isn't assigned, 

combined, or taken into account in any of the CRT's existing 

categories (ordinary income, capital gain, nontaxable 

income).

Amount of NII Allocable to Income Recipients

If a CRT makes the SNIIC election, distributions from a CRT 

to a recipient for a tax year consist of NII equal to the lesser 

of:

1. The total amount of the distributions to that recipient 

for that year, or

2. The current and accumulated NII of the CRT.

With this election, the classification of a distribution as 

consisting of NII or Excluded Income is independent from the 

character of the income distributed to the recipient for regular 

tax purposes using the section 664 category and class 

system. However, see Effect of the SNIIC Election on Netting 

and Ordering Rules, later.

Calculation of NII

In computing the CRT’s NII, if in a tax year a CRT’s properly 

allocable deductions described in section 1411(c)(1)(B) 

exceed the gross investment income and net gain described 

in section 1411(c)(1)(A), then such excess deductions shall 

reduce the NII for that tax year and, to the extent of any 

remaining excess deductions, reduce NII in subsequent tax 

years of the CRT.

Example. A CRT has dividend income of $1,000 and a 

long-term capital loss of $10,000 in 2022; and $11,000 

long-term capital gains in 2023. The CRT would have 

($9,000) of accumulated NII in 2022, so any 2022 

distributions to income recipients would not include any NII. 

In 2023, the CRT would have $2,000 of NII available for 

distribution in 2023 and after.

Note. The SNIIC election is available for the 2023 tax year 

under Proposed Regulations section 1.1411-3(d)(3). When 

finalized, Proposed Regulations section 1.1411-3(d)(3) is 

proposed to apply to tax years of the CRT beginning after 

December 31, 2012. However, if, after consideration of all 

comments received in response to those proposed 

regulations, it appears that there is no significant interest 

among taxpayers in having the option of using the simplified 

method, the IRS may omit this election from the regulations 

when finalized. If the SNIIC election is omitted, the CRT won't 

have to amend the 2023 return. The Instructions for Form 

5227 in a later year will describe the actions that the CRT 

must take to transition from the SNIIC to calculating NII using 

the section 664 category and class system.

When To Make the SNIIC Election

CRTs established after December 31, 2012. In the case 

of a CRT established after December 31, 2012, a CRT 

12 Instructions for Form 5227
wanting to make the SNIIC election must do so on its Form 

5227 return for the tax year in which the CRT is established.

CRTs established before January 1, 2013. In the case 

of a CRT established before January 1, 2013, the CRT 

wanting to make the election must do so on its Form 5227 

return for its first tax year beginning on or after January 1, 

2013.

Making a SNIIC election on an amended return. The 

CRT may make the election on an amended Form 5227 

return for that year only if the tax year for which the SNIIC 

election is made, and all tax years that are affected by the 

election, for both the CRT and its recipients, aren't closed by 

the period of limitations on assessments under section 6501.

How To Make the SNIIC Election and Completing 

the Form 5227 With a SNIIC Election

A CRT makes the SNIIC election by:

• Completing lines 1 through 3 of Part II by reporting all 

income received as Excluded Income;

• Completing lines 1 through 3 of Part I of Schedule A by 

reporting all income distributed as Excluded Income;

• Completing Part II of Schedule A; and

• Reporting the allocable share of NII to recipients 

consistent with the election.

Instructions for Part I of Schedule A

Column (a). Enter the amount from the prior year Form 

5227, Schedule A, Part I-B, line 4(d).

Column (b). Enter the CRT’s current year NII.

Using Form 8960 as a worksheet, include the 

amounts of income, gain, loss, and deductions 

reported on lines 1–12 of Form 8960 to compute NII 

(line 12 of Form 8960). Don't file the Form 8960 with the Form 

5227.

Column (c). Enter the lesser of (i) the sum of columns (a) 

and (b), or (ii) the total distributions for the year (reported on 

line 2a of Part I of Schedule A). If the sum of columns (a) and 

(b) is zero or less, enter -0- in column (c).

Column (d). Subtract column (c) from the sum of columns 

(a) and (b). This amount will be reported in column (a) of the 

2024 Form 5227.

Effect of the SNIIC Election on Netting and 

Ordering Rules

The SNIIC election will change the netting and ordering rules 

for ordinary income and capital gains or losses. See Ordering 

Rules for Ordinary Income and Additional Rules for Capital 

Gains and Losses, later, for illustrative charts.

You may want to read the Part III instructions and 

complete all worksheets (as necessary) before you 

make an entry on Part III of Schedule A.

Part III. Current Distributions 

Schedule (Section 664 trust only)

You must give each recipient listed in Part III a Schedule K-1 

(Form 1041) that reflects that recipient's current distribution. 

The following rules and worksheets will help you figure the 

type of income a recipient receives from the trust's 

distributions. Also, attach a copy of each Schedule K-1 to 

TIP TIP

Form 5227. See the Instructions for Schedule K-1 (Form 

1041) for more information.

Column (b). Recipient's Identifying Number

As a payer of income, the trust is required under section 6109 

to request and provide a proper identifying number for each 

recipient of income. Enter the recipient's number on the 

respective Schedule K-1. Individuals and business recipients 

are responsible for giving you their taxpayer identification 

numbers upon request. You may use Form W-9, Request for 

Taxpayer Identification Number and Certification, to request 

the recipient's identifying number.

Penalty

The trust may incur a penalty under section 6723 if it fails to 

provide the taxpayer identification number of each recipient 

or income beneficiary identified on Schedule A. The penalty 

is $50 for each failure to provide a required taxpayer 

identification number, unless reasonable cause can be 

established for the failure. If you are unable to provide the 

taxpayer identification number for any recipient or income 

beneficiary, explain the circumstances in a signed affidavit 

and attach it to this return.

Substitute Forms

You don't need prior IRS approval for a substitute 

Schedule K-1 if it is an exact copy of the IRS statement. The 

boxes must use the same numbers and titles and must be in 

the same order and format as on the comparable IRS 

Schedule K-1. The substitute schedule must include the 

OMB number. You must request IRS approval to use other 

substitute Schedules K-1. To request approval, write to:

Internal Revenue Service

Attention: Substitute Forms Program

SE:W:CAR:MP:P:TP

5000 Ellin Road, C6-440

Lanham, MD 20706

You may be subject to a penalty if you file a 

Schedule K-1 that does not conform to the 

specifications in Pub. 1167, General Rules and 

Specifications for Substitute Forms and Schedules.

For updates on the Substitute Forms Program after this 

publication went to print, go to the product page for Pub. 

1167 at IRS.gov/Pub1167.

Inclusion of Amounts in Recipients' Income

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

receiving their pro rata share of the various classes of income 

or corpus.

Amounts distributed by a charitable remainder annuity 

trust or a charitable remainder unitrust have the following 

characteristics in the hands of the recipients.

• First, as ordinary income to the extent of ordinary income 

for the current year and undistributed ordinary income for 

prior years of the trust. Ordinary income is computed without 

regard to any net operating loss deductions under section 

172. See the Ordering Rules for Ordinary Income, later.

• Second, as capital gains to the extent of the trust's 

undistributed capital gains. Undistributed capital gains of the 

CAUTION

!

Instructions for Form 5227 13
trust are determined on a cumulative net basis without regard 

to any capital loss carrybacks and carryovers. See the 

Netting Rules, Ordering Rules for Capital Gains and Losses, 

and Carryover Rules, later, for capital gains.

• Third, as nontaxable income to the extent of the trust's 

nontaxable income for the current year and undistributed 

nontaxable income for prior years.

• Fourth, as a distribution of trust corpus. For this purpose, 

trust corpus means the net FMV of the trust assets less the 

total undistributed income (but not loss) in each of the above 

categories.

Column (j). NII

If the CRT has not made a SNIIC election, then enter the total 

amount of NII allocated to each recipient in column (j) that is 

included in columns (d) through (g) for that recipient.

If the CRT has made a SNIIC election, then, for each 

recipient, multiply the amount in column (c) of Part II by the 

percentage reported in column (c) of line 4 of Part III of 

Schedule A, and enter the amount in column (j) for each 

recipient.

For each recipient, enter the difference between the 

amount in column (j) and the sum of the amounts in columns 

(d) through (f) using code H in box 14 of the Schedule K-1 

(Form 1041).

• If the amount in column (j) is less than the sum of the 

amounts in columns (d) through (f), enter the difference as a 

negative amount under code H in box 14 of the Schedule K-1 

(Form 1041).

• If the amount in column (j) is greater than the sum of the 

amounts in columns (d) through (f), enter the difference as a 

positive amount under code H in box 14 of the Schedule K-1 

(Form 1041).

Ordering rules for ordinary income. Ordinary income is 

composed of two classes for purposes of characterizing and 

ordering distributions: (a) qualified dividends, and (b) all other 

ordinary income. If the trust has both classes of ordinary 

income, distributions are treated as made first from all the 

other ordinary income class, and second from the qualified 

dividends class.

The following chart highlights the difference in ordering 

rules depending on whether the CRT elects to use the SNIIC 

method.

Ordering Rules for Ordinary Income

Section 664 Method SNIIC Election Method

1. Distributions of all other ordinary income: 

First, ordinary income that is NII (40.8% rate), then 

All ordinary income class

Ordinary income that is Excluded Income (37% rate)

2. Distributions from the qualified dividends class:

First, qualified dividends that are NII (23.8% rate), then

All qualified dividends Qualified dividends that are Excluded Income (20% rate)

Additional rules for capital gains and losses. The 

following charts highlight the difference in netting and 

ordering rules for capital gains and losses depending on 

whether the CRT elects to use the Simplified Net Investment 

Income Calculation (SNIIC) method. In general, if the CRT 

elects to use the SNIIC method, the netting and ordering 

rules will be essentially the same as those applicable before 

the 2013 tax year; every dollar distributed will carry out the 

CRT’s NII, to the extent of the CRT’s accumulated NII, without 

regard to the class or category of that distribution for regular 

tax purposes. If the CRT uses the section 664 method for 

calculating NII and Excluded Income, the netting and 

ordering rules are expanded to take into account additional 

classes within the ordinary income and capital gain 

categories that are created due to the imposition of an 

additional 3.8% tax on NII but not on Excluded Income.

Netting rules. Gains and losses are netted within each 

class to arrive at a net gain or loss for that class. After you net 

within a class, the following additional netting rules apply to 

the capital gains category.

Netting Rules

Section 664 Method SNIIC Election Method

1. Among the long-term capital gain and loss classes: 

(a) A net loss from the 28% long-term capital gain class that is NII (31.8% rate) reduces net gains in the following order:

First, gain from the section 1250 long-term capital gain class that is NII (28.8% rate), then 

Not Applicable

Net gain from the 28% long-term capital gain class that is Excluded Income (28% rate), then

Gain from the section 1250 long-term capital gain class that is Excluded Income (25% rate), then

Net gain from all the other long-term capital gain class that is NII (23.8% rate), and finally

Net gain from all the other long-term capital gain class that is Excluded Income (20% rate).

(b) A net loss from the 28% long-term capital gain class that is Excluded Income (28% rate) reduces net gains in the following order:

First, net gain from the 28% long-term capital gain class that is NII (31.8% rate), then First, gain from the section 

1250 long-term capital 

gain class, then Gain from the section 1250 long-term capital gain class that is NII (28.8% rate), then 

14 Instructions for Form 5227
Section 664 Method SNIIC Election Method

Gain from the section 1250 long-term capital gain class that is Excluded Income (25% rate), then Net gain from all the other 

long-term capital gain 

class.

Net gain from all the other long-term capital gain class that is NII (23.8% rate), and finally

Net gain from all the other long-term capital gain class that is Excluded Income (20% rate).

(c) A net loss from all the other long-term capital gain class that is NII (23.8% rate) reduces net gains in the following order:

First, net gain from the 28% long-term capital gain class that is NII (31.8% rate), then

Not Applicable

Gain from the section 1250 long-term capital gain class that is NII (28.8% rate), then 

Net gain from the 28% long-term capital gain class that is Excluded Income (28% rate), then

Gain from the section 1250 long-term capital gain class that is Excluded Income (25% rate), and finally

Net gain from all the other long-term capital gain class that is Excluded Income (20% rate).

(d) A net loss from all the other long-term capital gain class that is Excluded Income (20% rate) reduces net gains in the following order:

First, net gain from the 28% long-term capital gain class that is NII (31.8% rate), then First, net gain from the 

28% long-term capital 

gain class, then Gain from the section 1250 long-term capital gain class that is NII (28.8% rate), then 

Net gain from the 28% long-term capital gain class that is Excluded Income (28% rate), then Gain from the section 

1250 long-term capital 

gain class. Gain from the section 1250 long-term capital gain class that is Excluded Income (25% rate), and finally 

Net gain from all the other long-term capital gain class that is NII (23.8% rate). 

2. Among the short-term and long-term gain and loss classes: 

(a) A net short-term capital loss that is NII (40.8% rate) is applied to reduce the net short-term and net long-term capital gain classes as follows:

First, short-term capital gain class that is Excluded Income (37% rate), then First, net gain from the 

28% long-term capital 

gain class, then Net gain from the 28% long-term capital gain class that is NII (31.8% rate), then

Gain from the section 1250 long-term capital gain class that is NII (28.8% rate), then Gain from the section 

1250 long-term capital 

gain class, and finally Net gain from the 28% long-term capital gain class that is Excluded Income (28% rate), then

Gain from the section 1250 long-term capital gain class that is Excluded Income (25% rate), then

Net gain from all the other long-term capital gain class that is NII (23.8% rate), and finally Net gain from all the other 

long-term capital gain 

class. Net gain from all the other long-term capital gain class that is Excluded Income (20% rate).

(b) A net short-term capital loss that is Excluded Income (37% rate) is applied to reduce the net short-term and net long-term capital gain classes 

as follows:

First, short-term capital gain class that is NII (40.8% rate), then 

Net gain from the 28% long-term capital gain class that is NII (31.8% rate), then First, net gain from the 

28% long-term capital 

gain class, then Gain from the section 1250 long-term capital gain class that is NII (28.8% rate), then 

Net gain from the 28% long-term capital gain class that is Excluded Income (28% rate), then Gain from the section 

1250 long-term capital 

gain class, and finally Gain from the section 1250 long-term capital gain class that is Excluded Income (25% rate), then

Net gain from all the other long-term capital gain class that is NII (23.8% rate), and finally Net gain from all the other 

long-term capital gain 

class. Net gain from all the other long-term capital gain class that is Excluded Income (20% rate).

3. An overall net long-term capital loss reduces any net short-term capital gain as follows:

First, any net short-term capital gain that is NII (40.8% rate), then Overall net long-term 

capital loss reduces any 

net short-term capital gain. Any net short-term capital gain that is Excluded Income (37% rate).

Ordering rules for capital gains and losses. The 

following rules apply to undistributed long-term capital gains 

on assets held more than 1 year. If, in any tax year of the 

trust, the trust has both undistributed short-term capital gain 

and undistributed long-term capital gain, the short-term 

capital gain is deemed distributed before any long-term 

capital gain.

Ordering Rules for Capital Gains and Losses

Section 664 Method SNIIC Election Method

1. Any short-term capital gains are deemed to be distributed in the following order:

First, short-term capital gain class that is NII (40.8% rate), then

Short-term capital gains

Short-term capital gain class that is Excluded Income (37% rate).

Instructions for Form 5227 15
Section 664 Method SNIIC Election Method

2. Any long-term capital gains are deemed to be distributed in the following order:

The 28% long-term capital gain class that is NII (31.8% rate) is deemed distributed, then The 28% long-term capital 

gain class is deemed 

distributed, then The section 1250 long-term capital gain class that is NII (28.8% rate) is deemed distributed, then 

The 28% long-term capital gain class that is Excluded Income (28% rate) is deemed distributed, then The section 1250 long-term 

capital gain class is 

deemed distributed, and 

finally 

The section 1250 long-term capital gain class that is Excluded Income (25% rate) is deemed distributed, then

All other long-term capital gain class that is NII (23.8% rate) is deemed distributed, and finally All other long-term capital 

All other long-term capital gain class is deemed distributed. gain class. 

Carryover Rules

Section 664 Method SNIIC Election Method

1. If the trust has capital losses in excess of capital gains for any tax year: 

The excess of the 40.8% rate net short-term capital loss over the net long-term capital gain for that year is a 40.8% 

rate short-term capital loss carryover to the next tax year. 

The excess of the net 

short-term capital loss 

over the net long-term 

capital gain for that year 

is a short-term capital 

loss carryover to the next 

tax year. 

The excess of the 37% rate net short-term capital loss over the net long-term capital gain for that year is a 37% 

rate short-term capital loss carryover to the next tax year. 

The excess of the 23.8% net long-term capital loss over the net short-term capital gain for that year is a 23.8% 

long-term capital loss carryover to the next tax year.

The excess of the net 

long-term capital loss 

over the net short-term 

capital gain for that year 

is a long-term capital loss 

carryover to the next tax 

year. 

The excess of the 20% net long-term capital loss over the net short-term capital gain for that year is a 20% 

long-term capital loss carryover to the next tax year.

2. If the trust has capital gains in excess of capital losses for any tax year: 

The excess of the 40.8% rate net short-term capital gain over the net long-term capital loss for that year is, to the 

extent not deemed distributed, a 40.8% rate short-term capital gain carryover to the next tax year.

The excess of the net 

short-term capital gain 

over the net long-term 

capital loss for that year 

is, to the extent not 

deemed distributed, a 

short-term capital gain 

carryover to the next tax 

year.

The excess of the 37% rate net short-term capital gain over the net long-term capital loss for that year is, to the 

extent not deemed distributed, a 37% rate short-term capital gain carryover to the next tax year.

The excess of the 31.8% rate net long-term capital gain over the net short-term capital loss for that year is, to the 

extent not deemed distributed, a 31.8% rate long-term capital gain carryover to the next tax year.

The excess of the net 

long-term capital gain 

over the net short-term 

capital loss for that year 

is, to the extent not 

deemed distributed, a 

long-term capital gain 

carryover to the next tax 

year.

The excess of the 28.8% rate net long-term capital gain over the net short-term capital loss for that year is, to the 

extent not deemed distributed, a 28.8% rate long-term capital gain carryover to the next tax year.

The excess of the 28% rate net long-term capital gain over the net short-term capital loss for that year is, to the 

extent not deemed distributed, a 28% rate long-term capital gain carryover to the next tax year.

The excess of the 25% rate net long-term capital gain over the net short-term capital loss for that year is, to the 

extent not deemed distributed, a 25% rate long-term capital gain carryover to the next tax year.

The excess of the 23.8% rate net long-term capital gain over the net short-term capital loss for that year is, to the 

extent not deemed distributed, a 23.8% rate long-term capital gain carryover to the next tax year.

The excess of the 20% rate net long-term capital gain over the net short-term capital loss for that year is, to the 

extent not deemed distributed, a 20% rate long-term capital gain carryover to the next tax year.

16 Instructions for Form 5227
Part IV. Current Distributions

(Charitable lead trusts or pooled income funds only)

Line 1. A charitable lead trust uses line 1 of Part IV to report 

the aggregate amount of distributions made during the year 

to one or more noncharitable (private) beneficiaries. For 

example, when the lead period terminates, all future 

distributions are payable to the noncharitable beneficiary. 

However, because charitable lead trusts can vary 

considerably, the expiration of the lead period isn't the only 

context within which the trust may provide for payments to a 

noncharitable (private) beneficiary. See the annotations to 

the sample charitable lead trusts in Rev. Proc. 2007-45, 

2007-29 I.R.B. 89, and Rev. Proc. 2007-46, 2007-29 I.R.B. 

102, for examples of other situations in which amounts may 

be payable to a noncharitable beneficiary.

A pooled income fund uses line 1 of Part IV to report the 

amount distributable annually among one or more 

noncharitable (private) beneficiaries who hold income 

interests in the fund.

Part V. Assets and Donor Information

Line 2. Pooled income funds don't complete lines 1 and 2.

For trusts that answered “Yes” to question 1, complete all 

columns on line 2 for all donors to the trust in 2023. For 

additional donors to the trust that did not contribute to the 

trust in 2023, complete column (a) only.

For trusts that answered “No” to question 1, complete only 

column (a) for all donors to the trust.

Paperwork Reduction Act Notice. We ask for the 

information on this form to carry out the Internal Revenue 

laws of the United States. You are required to give us the 

information. We need it to ensure that you are complying with 

these laws and to allow us to figure and collect the right 

amount of tax.

You aren't required to provide the information requested 

on a form that is subject to the Paperwork Reduction Act 

unless the form displays a valid OMB control number. Books 

or records relating to a form or its instructions must be 

retained as long as their contents may become material in the 

administration of any Internal Revenue law. Generally, tax 

returns and return information are confidential, as required by 

section 6103.

The time needed to complete and file this form will vary 

depending on individual circumstances. The estimated 

average time is:

Recordkeeping ......... 89 hr., 11 min.

Learning about the law or the 

form ................ 21 hr., 54 min.

Preparing the form ....... 44 hr., 47 min.

Copying, assembling, and 

sending the form to IRS .... 5 hr., 54 min. 

If you have comments concerning the accuracy of these 

time estimates or suggestions for making this form simpler, 

we would be happy to hear from you. You can send us 

comments from IRS.gov/FormComments. Or you can write to 

the Internal Revenue Service, Tax Forms and Publications 

Division, 1111 Constitution Ave. NW, IR-6526, Washington, 

DC 20224. Don't send the form to this office.

Instructions for Form 5227 17
Capital Gains Distribution Worksheet (KEEP FOR YOUR RECORDS)

Use this worksheet to determine the ordering of any capital gains distributions.

Short-term Long-term

Excluded Accumulated

Net 

Investment 

Income 

(ANII) post2012 

28% long-term capital 

gain class

Section 1250 long-term 

capital gain class

All other long-term capital gain 

classes

Excluded

ANII 

post-2012 Excluded

ANII 

post-2012 Excluded ANII post-2012 

1. Prior years 

undistributed 

gain or 

(loss) ....

2. Current year 

net gain or 

(loss) ....

3. Total 

combined 

gain or (loss) 

by class . .

4. Adjustments 

for netting any 

long-term 

capital 

(losses) on 

line 3 ....

5. Total .....

6. Adjustments 

for netting any 

short-term 

capital gain or 

(loss) on 

line 3 (see 

Netting 

Rules,

earlier) ...

7. Total 

undistributed 

gains ....

8. 2023 

distributions...

9. Carryforward 

to 2024 (line 7 

less line 8)...

18 Instructions for Form 5227
Ordinary Income Distribution Worksheet (KEEP FOR YOUR RECORDS)

Use this worksheet to determine the ordering of any ordinary income distributions.

All other ordinary income Qualified dividends

Excluded Accumulated NII 

post-2012 

Excluded Accumulated NII post-2012 

 1. Prior years 

undistributed 

ordinary income or 

(loss) ........

2. Current year 

ordinary income or 

(loss) ........

3. Total combined 

ordinary income or 

(loss) by 

class ........

4. Adjustments for 

netting any 

ordinary (losses) 

on line 3 .....

5. Total undistributed 

ordinary 

income ......

6. 2023 

distributions...

7. Carryforward to 

2024 (line 5 less 

line 6) .......

Instructions for Form 5227 19
Index

C

Capital Gains Distribution 

Worksheet 18

Carryover rules 16

Current Distributions:

Netting Rules 14

Ordering Rules for Capital Gains 

and Losses 15

Ordering Rules for Ordinary 

Income 14

N

Net Investment Income Tax (NIIT) 6

Reg. Sec. 1.1411–10(g) Election 11

Simplified Net Investment Income 

Calculation (SNIIC) Election 12

O

Ordinary Income Distribution 

Worksheet 19

S

Schedule of Distributable Income 6

T

Type of Entity 4

20 Instructions for Form 5227