Skip to main content
Form 5227
Search
Search Trust Tax (ONESOURCE) Support Help and Support.

This article applies to:

  • Product: ONESOURCE Trust Tax

The Schedule of Distributable Income Collapsible Section

The
Schedule of Distributable Income
 collapsible section is used to:
  • Review prior year undistributed and current year net investment income and excluded income. See Reviewing Prior Year Undistributed and Current Year Income. For a CRAT or CRUT, net investment income received and distributed by the trust is tracked using Part II of Form 5227 and Schedule A. The character of the distribution is reported on the recipient Schedule K-1. Do not enter overrides in the grid under the
    Schedule of Distributable Income
     collapsible section for a CRAT or CRUT. If overrides are entered, they are not reported on the recipient Schedule K-1, and may result in incorrect reporting on Form 5227.
  • Form 5227 has no net investment income reporting requirements for nongrantor CLTs and PIFs. For these types of split-interest trusts, the net investment income tax is reported on Form 1041.
  • Review, enter and change information reported in Part III-A of Form 5227. See Entering Distributions of Principal for Charitable Purposes.
  • Review, enter and change information reported in Part III-B of Form 5227 for a CLT and PIF. See Entering Accumulated Income Set Aside and Current Year Income Distributions for Charitable Purposes.
The sections in the grid under the
Schedule of Distributable Income
 collapsible section are controlled by whether the default or simplified method is used to report net investment income. When the default method is used, the grid includes the
Excluded 664 Calculation
 and
Included in 664 Calculation
 sections. When the simplified method is used, the grid includes the
Simplified NII Calculation
 section.

Entering Distributions of Principal for Charitable Purposes

The fields for Part III-A of Form 5227 are accessed from the
Schedule of Distributable Income
 collapsible section on the Form 5227 page. The field for line 30 (for the amount of prior year distributions of principal for charitable purposes) is an override field. Information line 31 (for current year distributions of principal for charitable purposes) is entered using a grid. Line 31 amounts include:
  • Distributions of principal from a CRAT or CRUT to the charitable recipient during the term of the trust.
  • The remainder interest of a CRAT, CRUT or PIF distributed to the charitable recipient upon expiration of the income interest.
  • Distributions from a CLT in excess of the deduction allowed under I.R.C. Section 642(c).
To enter prior and current year distributions of principal for charitable purposes:
  1. Open the account.
  2. Select the
    Form 5227
     subtopic.
  3. Open the
    Schedule of Distributable Income
     collapsible section.
  4. Select the
    Detail
     link for
    Distribution of Principal for Charitable Purposes
    .
  5. The Form 5227 Details page displays.
  6. If necessary, enter an override for the prior year distribution of principal for charitable purposes in the
    Principal distributed in prior tax years for charitable purposes
     field.
  7. Use the grid to enter information for current year distributions of principal for charitable purposes. To add distribution information, enter the distribution information in each field in the row that includes the text, "Please select here to add new row." When you finish entering the information, press TAB until you move off the row. The distribution information is added as a row to the grid once you move off the row.
  8. Select
    Save
     in the upper left corner of the Form 5227 Details page.
  9. Select
    Close
     to return to the Form 5227 page.

Entering Accumulated Income Set Aside and Current Year Income Distributions for Charitable Purposes

Part III-B of Form 5227 is completed for CLTs and PIFs. The fields that apply to Part III-B are accessed from the
Schedule of Distributable Income
 collapsible section on the Form 5227 page. The field for line 33a (for accumulated income set aside for charitable purposes) is an override field. Information for line 35 (for current year income distributions for charitable purposes) is entered using a grid.
To enter accumulated income set aside and current year income distributions for charitable purposes:
  1. Open the account.
  2. Select the
    Form 5227
     subtopic.
  3. Open the
    Schedule of Distributable Income
     collapsible section.
  4. Select the
    Detail
     link for
    Accumulated Income Set Aside & Income Distributions for Charitable Purposes
    .
  5. The Form 5227 Details page displays.
  6. If necessary, enter an override for accumulated income set aside for charitable purposes in the
    Accumulated income set aside in prior years for which a deduction was claimed under section 642(c)
     field.
  7. Use the grid to enter information for current year income distributions for charitable purposes. To add distribution information, enter the distribution information in the fields in the row that includes the text, "Please select here to add new row." When you finish entering the information, press TAB until you move off the row. After you move off the row, the distribution information is added to the grid.
  8. Select
    Save
     in the upper left corner of the Form 5227 Details page.
  9. Select
    Close
     to return to the Form 5227 page.

Reviewing Prior Year Undistributed and Current Year Income

To review prior year undistributed and current year income:
  1. Open the account.
  2. Select the
    Form 5227
     subtopic.
  3. Open the
    Schedule of Distributable Income
     collapsible section.
  4. Review the income items in the grid. Do not enter overrides in this grid for a CRAT or CRUT. If overrides are entered, they are not reported on the recipient Schedule K-1, and may result in incorrect reporting on Form 5227. To correctly enter overrides, use the appropriate sections in balance sheet grids under the
    Balance Sheet
     and
    Expanded Balance Sheet
     collapsible sections. For example, if you want to override undistributed income, use applicable line items in the
    NET ASSETS EXCLUDED (SEC 664)
     and
    NET ASSETS Accumulated NII
     sections in the balance sheet grid under the
    Balance Sheet
     or
    Expanded Balance Sheet
     section.