Instructions for Form 5227, Split-Interest Trust Information Return

• Legal Form Number: 5227
• Year: 2025
• Issuer: Treasury Department
• Section: Treasury Department

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2023

Instructions for Form 5227

Split-Interest Trust Information Return

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to

Form 5227 and its instructions, such as legislation enacted

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

What’s New

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

in February 2023, filers are required to file Form 5227

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

a calendar year. The regulations are effective for returns

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

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

Reminders

Don't include social security numbers on publicly dis-

closed forms. With the exception of the items described

below, Form 5227 and its attachments are subject to public

disclosure. Items not subject to disclosure include

Schedule A (and any related early termination agreement);

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

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

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

8582, Passive Activity Loss Limitations; Form 8621,

Information Return by a Shareholder of a Passive Foreign

Investment Company or Qualified Electing Fund; and any

attachment that references contributor or donor information.

General Instructions

Purpose of Form

Use Form 5227 to:

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

•Provide certain information regarding charitable

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

and

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

purposes) as a private foundation and subject to certain

excise taxes under chapter 42.

Form 5227 is open to public inspection.

Use Schedule A of Form 5227 to report:

•Accumulations of income for charitable remainder trusts,

•Distributions to noncharitable beneficiaries/recipients, and

•Information about donors and assets contributed during

the year.

Schedule A of Form 5227 isn't open for public

inspection.

Who Must File

All charitable remainder trusts described in section 664 must

file Form 5227. All pooled income funds described in section

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

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

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

applies.

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

required to file Form 5227 if:

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

and

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

1969, or

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

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

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

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

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

which a deduction is allowed under any of the sections listed

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

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

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

corpus occurs and each subsequent year, the same as any

split-interest trust created after May 26, 1969.

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

1041-B, Charitable Remainder Trust. Form 5227 replaces

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

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

Charitable Amounts. Form 5227 replaces Form 1041-A for

split-interest trusts.

Which Parts To Complete

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

See the Definitions section of these instructions below.

Certain parts of Form 5227 apply exclusively to a particular

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

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

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

are identified in these instructions and on Form 5227 with a

parenthetical identifying the type of trust to which the part or

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

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

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

and VIII aren't completed by a charitable remainder or

charitable lead trust whose charitable interests involve only

war veterans' posts or cemeteries (as described in sections

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

Definitions

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

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

•Has some unexpired interests that are devoted to

purposes other than religious, charitable, or similar purposes

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

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

which a deduction was allowed under one of the sections

listed in section 4947(a)(2).

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

requirements and restrictions that are imposed on private

foundations.

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The most common forms of a split-interest trust include

the following.

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

annually pays a fixed annuity or unitrust amount to a

charitable organization for the lead period specified in the

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

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

individuals, as described in Regulations sections

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

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

have been allowed a deduction under one of the sections

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

annual payments to the charitable organization cease, and

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

a noncharitable (private) beneficiary.

Charitable remainder annuity trust (CRAT). This is a

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

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

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

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

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

of all property contributed to corpus, subject to the further

requirement that the remainder interest in the trust (measured

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

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

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

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

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

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

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

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

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

Upon termination of the recipient’s entitlement to the annuity

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

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

qualified employer securities are transferred to an employee

stock ownership plan.

Charitable remainder unitrust (CRUT). This is a

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

in many respects to a CRAT except that the amount payable

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

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

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

requirement described above that the remainder interest

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

trust corpus, determined at the time property is transferred to

the trust. Because the unitrust amount is calculated annually

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

determined upon the creation of the trust, the trustee must

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

termination of the recipient’s entitlement to payments of the

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

used by, a charitable organization described in section

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

employee stock ownership plan. The trust agreement for a

CRUT may allow the trustee to distribute less than the full

unitrust amount in years when the trust income (as defined

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

Net-Income Makeup Charitable Remainder Unitrust

(NIMCRUT) is a charitable remainder unitrust that allows

payment of the unitrust amount to be deferred in years when

the unitrust amount exceeds trust income, with the deferred

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

sufficient income. A Net Income Charitable Remainder

Unitrust (NICRUT) is a charitable remainder unitrust that

allows for deferral of the unitrust payment (as described

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

made up in future years.

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

references to charitable remainder trusts. These terms

include CRATs and CRUTs.

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

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

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

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

receive a lifetime income interest, based upon the rate of

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

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

the death of the donor and the termination of their income

interest, the charitable organization becomes entitled to the

portion of the trust corpus attributable to the donor’s

contribution, free of trust.

Recipient. A recipient is a beneficiary who receives the

possession or beneficial enjoyment of the unitrust or annuity

amount.

Foundation manager. A foundation manager is an officer,

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

responsibilities similar to those of officers, directors, or

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

“foundation manager” may also include an employee of the

trust who has the authority to act.

Disqualified person. A disqualified person is any of the

following.

1. A substantial contributor.

2. A foundation manager.

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

partnership, trust, or unincorporated enterprise, which is itself

a substantial contributor.

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

categories.

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

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

beneficial interest of more than 35%.

6. For purposes of section 4943 (excess business

holdings), a disqualified person also includes:

a. A private foundation which is effectively controlled

(directly or indirectly) by the same persons who control

the trust in question, or

b. A private foundation substantially all of the

contributions to which were made (directly or indirectly)

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

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

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

indirectly) substantially all of the contributions to the trust

in question.

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

disqualified person also includes certain government

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

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2Instructions for Form 5227