Instructions for Form 5227

2025

Instructions for Form 5227

Split-Interest Trust Information Return

Section references are to the Internal Revenue Code unless

otherwise noted.

definition of a split-interest trust under section 4947(a)(2)

must file Form 5227 unless the Exception next applies.

Future Developments

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.

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.

Reminders

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, later for more information.

Don't include social security numbers (SSNs) 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 Schedule 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

(CRTs),

• Distributions to noncharitable beneficiaries/recipients, and

• Information about donors and assets contributed during

the year.

Schedule A of Form 5227 isn't open to public

inspection.

Who Must File

All CRTs 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

Dec 3, 2025

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 Definitions below. Certain parts of Form 5227 apply

exclusively to a particular type of split-interest trust (such as a

CRT, 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

cemeteries or war veterans’ posts (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.

Instructions for Form 5227 (2025) Catalog Number 13228E

Department of the Treasury Internal Revenue Service www.irs.gov

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 ESOP.

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

ESOP. 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 CRUT 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 CRUT 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.

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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 clause (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.)

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the

National Center for Missing & Exploited Children® (NCMEC).

Photographs of missing children selected by the Center may

appear in instructions on pages that would otherwise be

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

Instructions for Form 5227

Phone Help

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

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, go to

IRS.gov/Charities/Non-Profits/PrivateFoundations.

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 2025 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.

Instructions for Form 5227

When To File

For calendar year 2025, file Form 5227 by April 15, 2026. 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 Regulations 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

3

Caution: 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 $25 for each day the failure continues with a

maximum of $13,000 for any one return. However, if the trust

has gross income greater than $327,000, the penalty is $130

for each day the failure continues with a maximum of $65,000

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 $6,500 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

CRUT, 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

CRAT, 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.

4

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).

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. CRTs 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 CRTs. 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 2025 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 CRTs. 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

Instructions for Form 5227

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

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

664 trust).

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

lines 1a through 5 and line 7 of the 2025 Schedule D (Form

5

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 2025 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 (NOLs)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

6

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, CRTs

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 CRT not taken into account in computing NII.

For 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,

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.

Instructions for Form 5227

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

year between Excluded Income and NII.

Caution: 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 under 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 (SNIIC), then report all income or loss

from Part I in the Excluded Income column and leave the NII

column empty. See instructions for SNIIC Electionin Part II

under 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.

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.

Instructions for Form 5227

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 CRUTs 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.

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.

7

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:

• 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

8

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

instructions. The statement should also identify the

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

other disqualified person.

Instructions for Form 5227

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.

CRUTs must include any unitrust amounts applicable to

prior periods that are unpaid but required to be paid as of the

valuation date, because 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 2025 (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 8 of the 2024

Form 5227.

If the amount entered isn't the same as line 8 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.

Instructions for Form 5227

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.

9

Line 1b. If you answered “Yes” to any of the questions on

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.

10

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 on

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 CRT has any unrelated business taxable income

(within the meaning of section 512 and related regulations)

for 2025, 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.

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 2025.

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 CRAT or certain CRUTs 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 CRT (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 CRATs and CRUTsor 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 (PFIC) (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

Instructions for Form 5227

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 SNIIC Election may also make the

Regulations section 1.1411-10(g) election. See Part II under

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

• 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

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.

11

Caution: 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 CRT 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.

Caution: Enter the paid preparer’s preparer tax identification

number (PTIN), not their 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, go to 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 2025 on the

short line to the immediate right of the “2025.”

Line 2b. Enter the amount distributed from each income

category.

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

12

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 2024; and $11,000

long-term capital gains in 2025. The CRT would have

($9,000) of accumulated NII in 2024, so any 2024

distributions to income recipients would not include any NII.

In 2025, the CRT would have $2,000 of NII available for

distribution in 2025 and after.

Note: The SNIIC election is available for the 2025 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 2025 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

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.

Instructions for Form 5227

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 II, line 4(d).

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

Tip: 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

2026 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.

Tip: 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

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

Instructions for Form 5227

numbers (TINs) 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 TIN of each recipient or income beneficiary

identified on Schedule A. The penalty is $50 for each failure

to provide a required TIN, unless reasonable cause can be

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

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

Caution: 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 CRAT or a CRUT 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 NOL deductions under section 172. See

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

trust are determined on a cumulative net basis without regard

to any capital loss carrybacks and carryovers. See 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.

13

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

Ordinary income that is Excluded Income (37% rate)

All ordinary income class

2. Distributions from the qualified dividends class:

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

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 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

All qualified dividends

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

1.

SNIIC Election Method

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

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

Not Applicable

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

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 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).

(c)

14

First, gain from the section

1250 long-term capital

gain class, then

Net gain from all the other

long-term capital gain

class.

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:

Instructions for Form 5227

Section 664 Method

SNIIC Election Method

First, 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

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

Not Applicable

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

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 NII (23.8% rate).

2.

First, net gain from the

28% long-term capital

gain class, then

Gain from the section

1250 long-term capital

gain class.

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

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

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)

First, net gain from the

28% long-term capital

gain class, then

Gain from the section

1250 long-term capital

gain class, and finally

Net gain from all the other

long-term capital gain

class.

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

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), 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).

3.

First, net gain from the

28% long-term capital

gain class, then

Gain from the section

1250 long-term capital

gain class, and finally

Net gain from all the other

long-term capital gain

class.

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

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

Overall net long-term

capital loss reduces any

net 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 gain class that is Excluded Income (37% rate).

Short-term capital gains

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

Instructions for Form 5227

The 28% long-term capital

gain class is deemed

distributed, then

15

Section 664 Method

SNIIC Election Method

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

All the other long-term

capital gain class.

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

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 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

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 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 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 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 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 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 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 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 2025. For

additional donors to the trust that did not contribute to the

trust in 2025, 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

Instructions for Form 5227

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 through IRS.gov/FormComments. Or, you can

write to the Internal Revenue Service, Tax Forms and

Publications, 1111 Constitution Ave. NW, IR-6526,

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

17

Capital Gains Distribution Worksheet

(KEEP FOR YOUR RECORDS)

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

Short-term

Excluded

Accumulated

Net

Investment

Income

(ANII) post2012

Long-term

28% long-term capital

gain class

Excluded

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.

2025

distributions...

9.

Carryforward

to 2026 (line 7

less line 8)...

18

ANII

post-2012

Section 1250 long-term

capital gain class

Excluded

ANII

post-2012

All other long-term capital gain

classes

Excluded ANII post-2012

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

Excluded

Accumulated NII

post-2012

Qualified dividends

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. 2025

distributions...

7. Carryforward to

2026 (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

20

N

Net Investment Income Tax (NIIT) 6

Reg. Sec. 1.1411–10(g) Election 11

Simplified Net Investment Income

Calculation (SNIIC) Election 12

S

Schedule of Distributable Income 6

T

Type of Entity 4

O

Ordinary Income Distribution

Worksheet 19

Instructions for Form 5227