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

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 Dec 3, 2025 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.

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.)