Part IX. Questionnaire for Charitable Lead Trusts, Pooled Income Funds, and Charitable…

Section A—All Trusts All trusts are required to answer lines 1 and 2.

10 Instructions for Form 5227

Section B—Charitable Lead Trusts

Line 3. The information on this line is used to determine whether sections 4943 and 4944 apply for 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

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.

Instructions for Form 5227 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).