Charitable Remainder Trusts and Preparing Form 5227 (Currently Unavailable)

Author: Steven G. Siegel

CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

Understand How CRTs Work and Preparing Form 5227, The Split-Interest Trust Return

With increasing income tax rates on the wealthiest taxpayers, client interest is growing in using charitable remainder trusts as a planning device not only to benefit charity, but to also reduce income and transfer taxes, especially when a taxpayer has appreciated property. Important rules involving income, gift and estate taxation may need to be addressed. When such a trust is created, it becomes necessary to prepare and file Form 5227, Split-Interest Trust Return to report the income and distributions of the trust, as well as to advise the IRS of the trust's ongoing performance.

This timely and helpful two-hour CPE webinar, presented by noted estates and trusts practitioner, author and educator Steven G. Siegel, J.D., LL.M, will arm you with knowledge and seasoned guidance to help you understand how charitable remainder trusts work and how to manage the compliance requirements in reporting to the IRS with Form 5227.

Join Mr. Siegel, an outstanding speaker and presenter, as he offers helpful tips and practical suggestions to give you and your staff a strong understanding of how to advise clients in this important area.

All professionals who work with clients on tax, estate, and financial planning matters will benefit from this timely and insightful course. Your program materials include a comprehensive and detailed outline prepared by Mr. Siegel for later study and reference. And, to reinforce your understanding and get help on your most pressing issues, you will have opportunities to submit questions to Mr. Siegel.

Publication Date: February 2019

Designed For
This course is essential for CPAs, CFPs, enrolled agents, estate planners, tax attorneys and other professionals who advise clients on tax, retirement and estate planning, and other wealth management matters.

Topics Covered

  • Charitable Remainder Trusts: General Description and Requirements - Charitable Remainder Annuity Trust - Charitable Remainder Unitrust
  • Availability of an Income Tax Deduction
  • Availability of an Estate and Gift Tax Deduction
  • The Trust as a Tax Exempt Entity
  • How Income is Taxed to the Income Beneficiary
  • Planning Opportunities with Charitable Remainder Trusts
  • Form 5227 Filing Requirements
  • Page 1 — Identification Information
  • Page 1 — Reporting Ordinary Income, Capital Gains and Losses, Nontaxable Income and Deductions
  • Page 2 — Schedule of Distributable Income; Description of Distributions of Principal and Income
  • Page 3 — Balance Sheet
  • Page 4 — Determine the Amount for Required Distributions
  • Page 5 — Answer Questions Addressing Excise Tax Exposure
  • Page 6 — Answer Various Questions about the Type of Trust Reported; Signatures
  • Page 7 — Schedule A, Distributions of Income to and Taxation of Beneficiaries

Learning Objectives

  • Describe what Charitable Remainder Trusts are and how they are used
  • Identify and apply the tax-exempt nature of CRTs
  • Recognize how to properly complete Form 5227, Split-Interest Trust Return
  • Identify the excise tax amount percentage if a charitable remainder trust has unrelated business taxable income (UBTI)
  • Recognize at which point 100% of the proceeds of a charitable remainder trust is available for reinvestment
  • Describe which types of income should be distributed from a charitable remainder trust last
  • Identify which line of Form 5227 trustee fees should be reported on
  • Recognize which section total assets calculated, with respect to Form 5227
  • Describe the maximum penalty, applicable to both the trust and the trustee, for failure to file timely a complete and accurate Form 5227
  • Recognize which type of charitable remainder trust allows for a fixed percentage of the amount being used to fund the trust to be paid to the grantor
  • Identify which form of charitable remainder trust offers the planner more flexibility
  • Recognize the most tax efficient type of asset to use in setting up a charitable remainder trust
  • Describe which type of arrangement pays a charity interest first, then pays non-charitable beneficiaries at the end of the charity's term
  • Recognize an allowable deduction for a charitable remainder trust
  • Describe Form 5227 components and filing requirements

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic knowledge of wealth transfer taxation concepts

Advance Preparation
None

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