Who Must File

According to Form 1041-A instructions, page 3:

"Split-interest trusts as described in section 4947(a)(2) don’t file Form 1041-A. These types of trusts file Form 5227, Split-Interest Trust Information Return, which meets the section 6034 filing requirements."

Form 5227 instructions state that the following types of organizations should use Form 5227:

"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 [listed on page 1 of Form 5227 instructions] applies."

e-File Requirement

Per 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. A filer required to file at least 10 returns of any type during the calendar year ending with or within the tax year must file their returns electronically. “Returns” for purposes of these instructions include information returns (for example, Forms W-2 and Forms 1099), income tax returns, employment tax returns (including quarterly Forms 941, Employer's Quarterly Federal Tax Return), and excise tax returns. The failure to file a return electronically when required is deemed a failure to file the return even if the filer submits a paper return.

Due Date

A calendar-year Form 5227 is due by April 15, 2024. A short-year final return is due by the 15^th day of the 4^th month following the termination.

Generate Form 5227

To generate Form 5227 in a 1041 return, follow these steps:

1. Complete all applicable screens on the 5227 tab.

2. On the EF screen, select 5227 only.

3. Complete the PIN screen.

4. Clear any EF messages on the 5227_MSG page in View/Print mode.

5. e-File as usual.

Extension Form 8868

e-File for Form 8868 is available starting with Drake Tax 2023. Complete Form 8868 using screen 8868, available on the 5227 tab. Be sure to indicate that the application is for Form 5227; doing so produces a Return Code of "10" on Form 8868. On the EF screen, select 8868 only. See the Form 8868 instructions for additional details.