Form 5227 Reporting: Charitable Split-Interest Annuity Trusts and Unitrusts

Practitioners filing IRS Form 5227, Split-Interest Trust Information Return, often struggle with material terms in preparing the complicated return. Common errors include misidentifying the type of split-interest trust, incorrectly calculating required payments to income recipients, and failing to identify trust provisions that impact the calculation of trust accounting income. Another significant preparation problem involves knowing which parts of Form 5227 to complete and which to omit.

Knowing how to read and extract information from the trust agreement is critical in determining what type of split-interest trust the donor created and which information filings are required. For example, a charitable remainder trust never requires filing Form 1041. However, a charitable lead trust or a pooled income fund does necessitate a Form 1041. Knowing the terms and requirements of each type of split-interest trust can help tax professionals avoid penalties for noncompliant filings.

Listen as our experienced panel provides a detailed and comprehensive guide to completing and filing Form 5227, as well as any ancillary filings accompanying split-interest trusts.

1. Identifying various types of charitable split-interest trusts
2. Filing Form 5227
3. Fiduciary accounting requirements
4. Ancillary forms
5. Identifying and avoiding common errors
6. Best practices

The panel will discuss these and other relevant issues:

• Definitions of the different types of trusts
• Trusts that require certain sections of Form 5227
• Computation of annual payments
• Income-deferral opportunities
• QBI and tax reform considerations

Learning Objectives

After completing this course, you will be able to:

• Identify the various types of charitable split-interest trusts
• Verify that Form 5227 information is reported completely and accurately
• Understand the application of the "four-tier rules"
• Ascertain which trusts are required to also file Form 1041
• Avoid penalties for noncompliant filings
• Recognize which trusts are considered a split-interest trust for purposes of Form 5227

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or firm experience preparing complex tax forms and schedules. Supervising other preparers/accountants. Specific knowledge and understanding of trusts, trust agreement provisions and calculating required payments to income recipients. Familiarity with UBTI rules, identification of various types of charitable split interest trusts and fiduciary accounting issues.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).