Split-Interest trusts, Filing Year 2006
by Lisa Schreiber
t
he Split-Interest Trust Information Return (Form 5227) is filed by entities with both charitable and noncharitable beneficiaries. In Filing Year 2006, preparers filed 124,036 Forms 5227, about the same number as in 2005.1 Total distributions remained stable, with $8.4 billion reported in both 2005 and 2006. The total end-of-year book value of assets in Filing Year 2006 was more than $108.2 billion, a 1.6-percent increase from 2005. A split-interest trust (SIT) can be created by a will or a trust instrument. The trust instrument specifies the term of the trust, designates the trustee(s), as well as the beneficiaries, and provides parameters for managing assets and distributing income to the beneficiaries. The instrument usually specifies the contents of the trust. The individual who owns, and then transfers, the assets that make up the trust corpus is known as the grantor. A trustee is charged with holding, investing, and distributing the income and assets of the trust. A trustee may be an individual, a group of individuals, or an entity such as a bank or charity. Each trustee must ensure that all transactions, including distributions, conform to the requirements of the trust document and to any applicable laws. Additionally, trustees must coordinate the preparation, verification, and submission of all required State and Federal tax forms. There are three distinct types of split-interest trusts: charitable remainder trusts, charitable lead trusts, and pooled income funds. In 2006, some 116,062 returns for charitable remainder trusts were submitted (Figure A). Trustees for charitable lead trusts submitted 6,298 returns in 2006, while pooled income fund trustees submitted 1,676 returns.
Charitable Remainder trusts
Under a charitable remainder trust (CRT) agreement, an income stream is distributed annually to one or more noncharitable beneficiaries for a defined period. The period may be either a fixed duration, statutorily
Lisa Schreiber is an economist with the Special Studies Special Projects Section. This article was prepared under the direction of Barry W. Johnson, Chief.
1 2 3 4 5
limited to 20 years, or the lifetime of a noncharitable beneficiary.2 At the conclusion of the period, the trust is dissolved, and the remaining value is distributed to predetermined charitable beneficiaries.3 The present value of the expected future charitable distribution must equal at least 10.0 percent of the initial fair market value of the assets placed in the trust.4 The donor must file a U.S. Gift Tax Return (Form 709) for all assets contributed to the trust. For tax year 2005, reflected in 2006 filings, any gift exceeding $11,000 is taxable and is included in the donor’s lifetime exclusion.5 At the time of trust creation, the donor receives an income tax deduction based on an estimate of the charitable distribution. The donor is also eligible for a gift tax deduction if the charitable beneficiary has been named. A beneficiary must report the distributions as gross income on his or her U.S. Individual Income Tax Return (Form 1040). There are two types of charitable remainder trusts. Charitable remainder annuity trusts (CRATs) and charitable remainder unitrusts (CRUTs) differ in the calculation of the noncharitable distribution amount. Charitable remainder annuity trusts annually distribute a fixed percentage, between 5.0 percent and 50.0 percent, of the initial fair market value of the property in the trust. As a result, the amount of the distribution to noncharitable beneficiaries from a CRAT should be the same each year. Charitable remainder unitrusts distribute a fixed percentage, between 5.0 percent and 50.0 percent, of the fair market value of the trust property, valued annually. Therefore, the value of the distribution to noncharitable beneficiaries from a CRUT, called the unitrust amount, may vary from year to year, depending on the value of the assets in the trust. There are two common variants of charitable remainder unitrusts that allow for added flexibility of noncharitable distributions. One variant, a net income charitable remainder unitrust (NI-CRUT), permits the trustee to distribute only the amount of trust income for that year, should that amount be less than the distribution that would otherwise be required.6 This allows the trustee to limit distributions in years when the trust’s income is low, to avoid depletion of
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6
A filing year includes all returns submitted to IRS processing between January 1 and December 31 of that year. Returns filed in 2006 were primarily for Tax Year 2005. For more information on the allowable duration of charitable remainder trusts, see Internal Revenue Code section 664(d)(1)(A) and 664(d)(2)(A). The qualifications for a “charitable beneficiary” are detailed in Internal Revenue Code section 170(c). The method for determining the fair market value of a trust is given in Internal Revenue Code section 7520. The gift tax threshold is indexed for inflation. In the case of a couple who are splitting gifts, the threshold is doubled. For more information regarding net income charitable remainder unitrusts, see Internal Revenue Code section 664(d)(3)(A).
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure A
[Money amounts are in thousands of dollars]
Profile of Split-Interest Trusts, by Type of Trust, Filing Years 2005 and 2006
Item 2005 (1) All 2006 (2) 124,036 8,390,320 108,248,391 Charitable remainder annuity trusts 2005 (3) 21,667 1,002,261 9,540,935 Charitable lead trusts 2005 (7) 2006 (8) 6,298 1,058,070 16,485,658 2005 (9) 1,677 127,290 1,620,701 2006 (4) 21,296 1,232,106 9,041,175 Charitable remainder unitrusts 2005 (5) 94,779 6,358,763 79,845,710 2006 (6) 94,767 5,978,298 81,121,949
Number of returns Total distributions [1] Book value of assets, end of year [2] Item
124,292 8,424,057 106,507,419
Pooled income funds 2006 (10) 1,676 121,847 1,599,610
Number of returns Total distributions [1] Book value of assets, end of year [2]
6,168 935,744 15,500,073
[1] In the case of charitable remainder annuity trusts and charitable remainder unitrusts, the value of distributions have been calculated as the sum of all distribution types from the Current Distributions Schedule (Form 5227, Part III). In the case of charitable lead trusts, distributions have been calculated as the sum of "excess income required to be paid for charitable purposes" (line 2), "annuity or unitrust payment required to be paid to charitable beneficiaries" (line 3), and "annuity or unitrust payments required to be paid to private beneficiaries" (line 4) from Form 5227, Part VII, Section A, the Questionnaire for Charitable Lead Trusts. In the case of pooled income funds, distributions were calculated as the "amount required to be distributed to satisfy the remainder interest" (line 2), plus the "amount of income required to be paid to the private beneficiaries" (line 4), plus the "amount of income required to be paid to the charitable remainder beneficiary" (line 5), less the "amounts that were required to be distributed to the remainder beneficiary that remain undistributed" (line 3) from Form 5227, Part VII, Section B, the Questionnaire for Pooled Income Trusts. [2] Taken from Form 5227, Part IV, column (b). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
the trust corpus. A related variant is called the net income with makeup charitable remainder unitrust (NIM-CRUT).7 A NIM-CRUT works like a NICRUT, in that the trustee is allowed to distribute the lesser of the trust income or the required percentage of fair market value. However, the reductions in required distributions accumulate. The trustee must make up for previous distribution deficiencies when trust income permits. Charitable remainder unitrusts may accept property transfers throughout the life of the trust. These are called “additional contributions.” These contributions may be in the form of any asset, including cash and stock. All additional contributions must be detailed on an attachment to the Form 5227 filed for the year in which the contribution was received. The presence of additional contributions complicates the calculation of the unitrust amount. Preparers must
prorate the value of the contributions based on the date they were donated to the trust.8 The unitrust amount is then calculated by multiplying the sum of the balance sheet fair market value and the prorated value of the additional contributions by the unitrust percentage.
Charitable lead trusts
Under a charitable lead trust (CLT) agreement, a charitable organization receives the income interest in the trust assets, while the remainder interest is assigned to a noncharitable beneficiary, usually the grantor or the grantor’s spouse. Annual distributions are made to a predetermined charitable beneficiary. The amount of CLT distributions is not constrained by minimum or maximum payout restrictions. The distributions continue for the lifetime of the noncharitable beneficiary.9
For more information regarding net income with makeup charitable remainder unitrusts, see Internal Revenue Code section 664(d)(3)(B). Prorating requires the preparer to calculate the number of days remaining in the year when the additional contribution is made. This number is then divided by the total number of days in the calendar year. The resulting percentage is then multiplied by the value of the additional contribution to determine the prorated value of the additional contributions. 9 In order to qualify, the individual or individuals must be the donor, the donor’s spouse, a linear ancestor of a noncharitable beneficiary, or the spouse of a linear ancestor of a noncharitable beneficiary. For more information, see Treasury Regulations 1.1170A-6(c)(2)(i).
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Charitable lead trusts are classified as annuity trusts or unitrusts depending on the calculation of the distribution amount. Charitable lead annuity trusts (CLATs) distribute a fixed dollar amount of the initial fair market value of the trust property. Charitable lead unitrusts (CLUTs) distribute a fixed percentage of the net fair market value of the trust property, determined annually. CLATs tend to be favored over CLUTs. CLATs do not require that the trust property be revalued annually, therefore reducing the trustee’s costs, and allow the noncharitable remainder beneficiaries to benefit from the appreciation of trust assets. CLTs are further classified by the role of the donor. If the donor of the trust assets is the noncharitable beneficiary, the trust is classified as a grantor charitable lead trust. In this case, the grantor will receive an income tax deduction up to the amount of the present value of the future charitable distributions as well as a gift tax deduction.10 Because a grantor CLT is not considered a separate taxable entity, the grantor must pay tax on income earned by the trust. Grantor CLTs are generally used to convert future charitable contributions into a current tax deduction. A trust is classified as a nongrantor charitable lead trust if the donor of the trust property is not a beneficiary. In the case of nongrantor charitable lead trusts, the grantor receives only a gift tax charitable deduction at the time of the trust creation equal to the present value of the future charitable distributions. The nongrantor CLT is considered a fully taxable separate entity for income tax purposes. As a result, the grantor is not liable for tax owed on trust income. Nongrantor CLTs are generally used as a transfer tax reduction technique.
celled without consent of the beneficiary. Generally, donors contribute to existing pooled income funds, thus incurring far lower administrative costs to the grantor than a charitable remainder trust. At the time of donation, the grantor receives income and gift tax deductions equal to the estimated value of the eventual charitable contribution. The donee charity, commonly a large educational institution, is responsible for the maintenance of the fund, including investing assets and making distributions to beneficiaries. PIFs are prohibited from investing in tax-exempt securities. Each year, grantors receive a distribution from the fund based on the ratio of their contributions to the value of the investment pool and the return on the fund assets for that year. These distributions are reported as gross income on the grantor’s Form 1040. At the time of the donor’s death, the charity receives the grantor’s prorated share of the value of the PIF.
Analysis Overview
Pooled Income Funds
Under a pooled income fund (PIF) arrangement, donors to a charitable organization contribute assets to a pool of donated assets and, in return, receive income payments for the remainder of the grantors’ lifetimes.11 The transfer of assets to the fund must be irrevocable, meaning it cannot be altered or can10
A Split-Interest Trust Information Return (Form 5227) must be submitted for each calendar year a split-interest trust is in existence.12 Form 5227 must be filed with the IRS by April 15 of the year following the applicable calendar year. Form 5227 is used to disclose the financial activities of the trust, not to calculate tax liability. If a trust incurred any taxable income during the calendar year, a Form 1041, United States Income Tax Return for Estates and Trusts, must be completed. The number of Forms 5227 filed decreased from 124,292 during Filing Year 2005 to 124,036 in 2006 (Figure A). Charitable remainder unitrusts remained the most common type of split-interest trust. Pooled income funds made up the smallest percentage of the SIT population. The majority of returns filed in 2006 were for ongoing trusts, in neither the first nor last year of existence. However, some 4,213, or 3.4 percent of the population, were filed with an initial status (Figure B).13 Final returns were even less common; in 2006, preparers for terminating trusts filed 3,720 returns. The average lifetime of a terminating trust in Filing Year 2006 was almost 12 years.14
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This charitable deduction is not without limit. In general, individuals may not receive a deduction for a charitable contribution in excess of 50.0 percent of the taxpayer’s contribution base, usually equal to the adjusted gross income. This and other related limitations on charitable deductions are further described in Internal Revenue Code section 170(b). 11 Pooled income funds are further discussed in Internal Revenue Code section 642(c)(5). 12 Split-interest trusts created before May 27, 1969, are exempt from having to file a Form 5227, as long as no amounts have been transferred to the trust since May 27, 1969. 13 An initial return denotes the first return filed by a trust during its lifetime. Generally, these returns cover the tax year in which the trust was created. 14 The trust lifetime was estimated by subtracting the year of the reported creation date from the tax year of the final return.�� Trusts that do not report end-of-year total assets, or that report the amount as zero, are often final-year filers. In those instances, the trusts usually report asset amounts for the beginning of the year, but, as they have terminated, there are no trust assets to report for the end of the year.
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure B
Filing Status Frequency, by Type of Trust, Filing Year 2006
All Filing status Number of returns (1) All returns Initial [1] Final [2] 124,036 4,213 3,720 Percent of total (2) 100.0 3.4 3.0 Charitable remainder annuity trusts Number of returns (3) 21,296 763 1,168 Charitable lead trusts Number of returns (7) All returns Initial [1] Final [2]
* Estimate should be used with caution because of the small number of sample returns on which it is based. [1] An initial return status is denoted by selecting the "Initial return" box on line E of Form 5227. [2] A final return status is denoted by selecting the "Final return" box on line E of Form 5227.
Charitable remainder unitrusts Number of returns (5) 100.0 3.6 5.5 94,767 3,166 2,334 Pooled income funds Number of returns (9) 100.0 4.5 * 2.5 1,676 0 * 62 Percent of total (10) 100.0 0 * 3.7 Percent of total (6) 100.0 3.3 2.5
Percent of total (4)
Filing status
Percent of total (8)
6,298 283 * 156
Paid preparers completed 75.6 percent of returns filed in 2006 (Figure C). However, in some instances, the trustee type may indicate the presence of a professional preparer even when the return does not indicate a paid preparer. Of those returns that did not indicate a paid preparer, 89.1 percent reported institutions, such as banks or charities, as the trustee. When entities such as these are acting as trustee, it is likely that the return was professionally prepared even if a paid preparer did not sign the return. For example, while paid preparers completed only 44.5 percent of the returns filed for pooled income funds, institutional trustees were reported for 91.1 percent of the PIF returns that did not indicate a paid preparer. CLTs were the type of trust most likely to be completed by a paid preparer. In 2006, only 17.2 percent of forms filed for CLTs did not utilize a paid preparer. Form 5227 is divided into several parts, many of which are only completed for one type of split-interest trust. All trusts report the total fair market value of assets in the trust at the end of the tax year, as well as distribution information. The balance sheet portion of Split-Interest Trust Information Return is a detailed listing of the assets and liabilities of the trust and is completed, at least in part, by all SITs. There are three separate valuations for each asset and liability category: beginning-of-year book value;
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end-of-year book value; and fair market value. The beginning- and end-of-year book values are reported for all types of trusts. For all SITs, the end-of-year book value of trust assets increased from $106.5 billion in Filing Year 2005 to $108.2 billion in 2006. The fair market valuation is only required for charitable remainder unitrusts. Tax law requires the fair market value to be assessed on the same date and by the same method each year that a Form 5227 is filed for a CRUT. Assets are apportioned into several categories, including cash, receivables, and investments. Investments are further separated into five categories: U.S. and State government obligations; corporate stock; corporate bonds; land, buildings, and equipment; and other. Liabilities are also separated into four categories, including accounts payable and deferred revenue. This article primarily focuses on split-interest trust reporting for Filing Year 2006, reporting, primarily, information and activities that occurred in Calendar Year 2005. Throughout this article, trusts are described in terms of size as small, medium, or large, based on the trust’s reported end-of-year total book value of assets. Small trusts are defined as those that reported total assets of $500,000 or less, including those trusts that either did not report endof-year book value of total assets or that reported the amount as zero.15 Medium trusts are defined as those
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Trusts that do not report end-of-year total assets, or that report the amount as zero, are often final-year filers. In those instances, the trusts usually report asset amounts for the beginning of the year, but, as they have terminated, there are no turst assets to report for the end of the year.
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure C
Utilization of Paid Preparers and Distribution of Trustee Type, by Type of Trust, Filing Years 2005 and 2006
Preparer status and type of trustee 2005 (1) All returns, total Paid preparer [1] Unpaid preparer, total Institutional trustee Noninstitutional trustee 124,292 88,442 35,850 33,338 2,512 All 2006 (2) 124,036 93,717 30,318 27,012 3,306 Charitable remainder annuity trusts 2005 (3) 21,667 12,883 8,785 8,614 171 Charitable lead trusts 2005 (7) All returns, total Paid preparer [1] Unpaid preparer, total Institutional trustee Noninstitutional trustee 6,168 4,950 1,219 1,158 60 2006 (8) 6,298 5,217 1,081 894 187 2005 (9) 1,677 815 862 862 0 2006 (4) 21,296 13,262 8,033 7,601 432 Chartiable remainder unitrusts 2005 (5) 94,779 69,795 24,984 22,703 2,281 Pooled income funds 2006 (10) 1,676 746 930 847 83 2006 (6) 94,767 74,492 20,274 17,670 2,604
Preparer status and type of trustee
[1] The presence of a paid preparer is indicated on Form 5227 by the completion of the paid preparer section found on page 4 of the return.
with between $500,000 and $3.0 million in total assets. Large trusts are defined as those that reported total assets of $3.0 million or more.
Analysis by type of trust
Charitable Remainder trusts
The income and deductions portion of Form 5227 is completed only for charitable remainder trusts, for which 116,062 returns were filed in 2006 (Figure D). Reported ordinary income is divided into seven classifications that include interest income, ordinary dividends, and business income or loss. Total ordinary income of $3.0 billion was reported for CRTs in 2006, of which $2.7 billion, or 90.3 percent, was reported for CRUTs. Deductions allocable to ordinary income are divided into three classifications: interest, taxes, and other deductions totaled $547.6 million in 2006.16 The total ordinary income less deductions allocable to ordinary income is referred to, in this article, as “net ordinary income.” In 2006, this amount was $2.4 billion.
Capital gains and losses are reported separately from net ordinary income. The total short-term capital gain or loss amount, as well as the total long-term capital gain or loss amount, is taken from Form 1041 Schedule D, Capital Gains and Losses, for the corresponding tax year. Deductions reduce the short- and long-term amounts, resulting in a “net short-term capital gain (loss)” and a “net long-term capital gain (loss).” Charitable remainder trust returns reported total net capital gains of $7.4 billion in 2006 (Figure D). This is an increase of 16.6 percent from $6.4 billion in 2005. A possible explanation for this increase may be continued effects of the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) of 2003, which reduced the long-term capital gain tax rate from 20.0 percent to 15.0 percent, and, therefore, spurred the sales of capital assets. The 2005 tax year, reflected on returns filed in 2006, was the second full year that the law was in effect. Net long-term capital gains made up approximately 96.1 percent, or $7.2 billion, of total net capital gains reported for CRTs in 2006. This is an increase of nearly $1.2 billion over the net long-
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Charitable remainder trusts are not allowed deductions for personal exemptions, charitable contributions, net operating losses, income distributions, capital loss carry forwards, Federal income taxes, or Federal excise taxes.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
term capital gains reported for CRTs in 2005. This change is minor compared to the $2.5 billion, or 81.3 percent, increase seen between Filing Years 2004 and 2005, when the JGTRRA was initiated. In this article, total net income is defined as the sum of net ordinary income, net capital gains, and nontaxable income. Nontaxable income, primarily from municipal bonds, is also reported separately from ordinary income. Charitable remainder trusts reported $127.4 million in nontaxable income in 2006, a decrease of 4.5 percent from the $133.4 million reported in 2005 (Figure D). Total net income reported for charitable remainder trusts increased by 10.6 percent, from $9.0 in 2005 to $10.0 billion in 2006, despite the relatively small increase, 0.3 per-
cent, in the number of returns filed. This increase is attributable to the $1.1 billion increase in the total net capital gains reported for CRTs. The accumulation schedule section of Form 5227 shows the flow of income through the trust from January 1 to December 31 of the tax year.17 This section is also only completed for charitable remainder trusts. Income is reported in two categories: undistributed income from prior years and current-year income. Income in these two categories is further disaggregated by source: ordinary; net short-term capital gains and losses; net long-term capital gains and losses; and nontaxable. Returns filed for CRTs in 2006 reported total accumulations, including ordinary income, short-term and long-term capital gains,
Figure D
[Money amounts are in thousands of dollars]
Overview of Charitable Remainder Trusts, Filing Years 2005 and 2006
Item All charitable remainder trusts 2005 (1) 2006 (2) 116,062 9,991,947 2,425,472 7,439,099 127,376 66,278,298 56,286,350 9,991,947 59,734,950 7,210,404 90,163,123 6,746,676 1,281,565 10,273 79,535,080 2,589,506 1,358,047 88,805,077 Charitable remainder annuity trusts 2005 (3) 21,667 817,535 226,971 550,259 40,305 5,540,401 4,722,866 817,535 4,737,789 1,002,261 9,540,935 1,066,482 135,076 2,474 8,035,587 301,310 144,313 9,389,909 2006 (4) 21,296 853,971 235,279 579,224 39,468 5,407,534 4,553,562 853,971 4,481,374 1,232,106 9,041,175 763,038 155,005 2,457 7,834,583 286,088 166,179 8,874,996 Charitable remainder unitrusts 2005 (5) 94,779 8,212,876 2,290,808 5,828,984 93,085 59,570,962 51,358,084 8,212,876 53,959,127 6,358,763 79,845,710 5,952,691 1,001,894 23,058 69,584,949 3,283,095 1,219,626 78,594,845 2006 (6) 94,767 9,137,976 2,190,193 6,859,875 87,908 60,870,765 51,732,788 9,137,976 55,253,576 5,978,298 81,121,949 5,983,637 1,126,560 7,816 71,700,498 2,303,418 1,191,868 79,930,081
Number of returns Total net income [1] Net ordinary income [2] Total net capital gains (losses) [3] Nontaxable income [4] Total accumulations [5] Prior year undistributed Current year accumulations Undistributed at end of tax year [6] Total distributions [7][8] Total book value of assets at end of year Cash, savings, and temporary cash investments Receivables due [9] Inventories and prepaid expenses Investments Other assets [10] Total book value of liabilities at end of year Net book value assets at end of year [11]
116,446 9,030,411 2,517,779 6,379,243 133,389 65,111,364 56,080,951 9,030,411 58,696,916 7,361,024 89,386,646 7,019,174 1,136,970 25,532 77,620,536 3,584,405 1,363,939 87,984,754
[1] Calculated as the sum of "ordinary income less deductions" (Form 5227, Part I, line 13), "net short-term capital gains (losses)" (line 16), "net long-term capital gains (losses)" (line 19), and "current tax year nontaxable income" (Part II, line 21(d)). [2] Taken from "ordinary income less deductions" (Form 5227, Part I, line 13). [3] Calculated as the sum of "net short-term capital gains (losses)" (Form 5227, Part I, line 16) and "net long-term capital gains (losses)" (line 19). [4] Taken from "current tax year nontaxable income" (Form 5227, Part II, line 21(d)). [5 ] Taken from Form 5227, Part II, line 22. [6] Taken from Form 5227, Part II, line 23. [7] Calculated as the sum of all distributions reported on Part III of Form 5227. [8] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [9] Calculated as the sum of "accounts receivable" (Form 5227, Part IV, line 27, column (b)), "receivables due from officers, directors, and other disqualified persons" (line 28, column (b)), and "other notes and loans receivable" (line 29, column (b)). [10] Calculated as the sum of charitable purpose land, buildings, and equipment (Form 5227, Part IV, line 35, column (b)) and other assets (line 36, column (b)). [11] Taken from Form 5227, Part IV, line 46, column (b). This is the excess of total assets over total liabilities. This value may deviate from the calculated value of total assets (line 37, column (b)) less total liabilities (line 43, column (b)) due to taxpayer reporting error. NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
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Those distributions made after December 31 of a tax year, for that tax year, will be included as undistributed at the end of the tax year on the accumulation schedule.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
and nontaxable income, of $66.3 billion (Figure D). Approximately $56.3 billion of the accumulations were undistributed from prior tax years. The accumulation schedule shows undistributed income at the end of the tax year, which is the amount of income held by the trust on the last day of the calendar year, once all payouts and distributions have been recorded. In Filing Year 2006, some $59.7 billion was reported for end-of-year undistributed income. As shown in Figure D, returns filed for charitable remainder trusts reported $7.2 billion in distributions and $90.2 billion in endof-year book value assets of in Filing Year 2006.
Charitable Remainder Annuity Trusts During Filing Year 2006, some 21,296 Forms 5227 were filed for charitable remainder annuity trusts. This is a 1.7-percent decrease from Filing Year 2005, when 21,667 returns were filed. As in 2005, the majority of CRATs included in Filing Year 2006 were small trusts, with end-of-year book value of total assets less than $500,000 (Figure E). Approximately $854.0 million in total net income was reported for CRATs in 2006. The percentage of net income attributable to net long-term capital gains increased slightly between 2005 and 2006. Reported to be $560.7 million, net long-term capital gains composed
65.7 percent of net income for CRATs. Nontaxable income accounted for the smallest portion of total net income. Reported total accumulations for charitable remainder annuity trusts decreased from $5.5 billion in Filing Year 2005 to $5.4 billion in 2006 (Figure F). This included $4.6 billion in prior-year undistributed income as well as $854.0 million in current-year income. At the end of the tax year, CRATs reported $4.5 billion in undistributed income. Most of the undistributed income, 91.2 percent or $4.1 billion, was in the form of net long-term capital gains. Figure G shows distributions made by charitable remainder annuity trusts in Filing Year 2006. In total, $1.2 billion were distributed. The allocation of distributions between sizes of CRATs in 2006 parallels the allocation in previous filing years. Small CRATs, which accounted for 82.1 percent of all returns filed, accounted for 53.7 percent of distributions. Large CRATs accounted for 21.3 percent of total distributions but made up only 1.9 percent of the CRAT population. Long-term capital gains represented the largest portion of distributions for CRATs of all sizes. Corpus distributions constituted a decreasing percentage of distributions as size of charitable remainder annuity trusts increased, while
Figure e
Charitable Remainder Annuity Trusts: Income and Deductions, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net income [2] Net ordinary income [3] Total ordinary income Deductions allocable to ordinary income Net short-term capital gains or (losses) [4] Net long-term capital gains or (losses) [5] Nontaxable income [6] 21,296 853,971 235,279 289,283 54,003 18,504 560,720 39,468 Under $500,000 [1] (2) 17,480 158,870 53,623 70,521 16,898 5,385 91,099 8,763 $500,000 under $3,000,000 (3) 3,417 318,043 92,279 113,700 21,421 6,058 201,654 18,052 $3,000,000 or more (4) 399 377,057 89,377 105,061 15,684 7,061 267,968 12,652
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[1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Calculated as the sum of "ordinary income less deductions" (Form 5227, Part I, line 13), "net short-term capital gains (losses)" (line 16), "net long-term capital gains (losses)" (line 19), and "current tax year nontaxable income" (Part II, line 21 (d)). [3] Taken from "ordinary income less deductions" (Form 5227, Part I, line 13). This amount may not equal "total ordinary income" (line 8) less "total deductions allocable to ordinary income" (line 12) due to taxpayer reporting discrepancies. [4] Taken from Form 5227, Part I, line 16. [5] Taken from Form 5227, Part I, line 19. [6] Taken from Form 5227, Part II, line 21(d). NOTE: Detail may not add to totals due to rounding.
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure F
[Money amounts are in thousands of dollars]
Charitable Remainder Annuity Trusts: Accumulation Information, by Type of Income, Filing Year 2006
Type of income Item Total Net ordinary income (2) 491,620 256,341 235,279 219,674 Capital gains (losses) Net short-term (3) 50,752 21,668 18,504 24,213 Net long-term (4) 4,681,536 4,131,396 560,720 4,089,062 Nontaxable income (5) 183,626 144,158 39,468 148,425
(1) Total accumulations [1] Prior-year undistributed [2] Current-year accumulations [3] Undistributed at end of tax year [4]
[1] Taken from Form 5227, Part II, line 22. [2] Taken from Form 5227, Part II, line 20. [3] Taken from Form 5227, Part II, line 21. [4] Taken from Form 5227, Part II, line 23.
5,407,534 4,553,562 853,971 4,481,374
NOTES: Detail may not add to totals due to rounding. Additionally, the total accumulations for capital gains (losses) may be skewed due to netting short- and long-term values together.
Figure G
Charitable Remainder Annuity Trusts: Distributions, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item All (1) Number of returns Total distributions [2] Ordinary income [3] Short-term capital gains [4] Long-term capital gains [5] Nontaxable income [6] Corpus [7] 21,296 1,232,106 272,509 29,389 565,694 34,056 330,457 Under $500,000 [1] (2) 17,480 661,287 98,710 12,185 292,400 10,436 247,555 $500,000 under $3,000,000 (3) 3,417 307,810 90,792 8,036 142,526 14,715 51,741 $3,000,000 or more (4) 399 263,009 83,007 9,168 130,767 8,905 31,161
[1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often these zero amounts are explained by trusts filing a final return. [2] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [3] Reported on Form 5227, Part III, column (a). [4] Reported on Form 5227, Part III, column (b). [5] Reported on Form 5227, Part III, column (c). [6] Reported on Form 5227, Part III, column (d). [7] Reported on Form 5227, Part III, column (e). NOTE: Detail may not add to totals due to rounding.
ordinary income increased as a percentage of distributions as size of CRATs increased. Overall, distributions from CRATs increased by 22.9 percent from Filing Year 2005 to Filing Year 2006. One source of year-to-year variation in aggregate estimates is a change in the CRAT population due to the creation or termination of trusts. Figure H presents the 2005 and 2006 Filing Year data for CRATs that did not begin or terminate during the
year. In contrast with the population, distributions for ongoing trusts decreased by 5.4 percent between 2005 and 2006. Figure I shows the allocation of distributions among basic beneficiary types. Trust grantors received the largest percentage of total distributions, 47.8 percent or $589.3 million. Charitable beneficiaries received 26.3 percent of all reported distributions. Noncharitable entities and nongrantor individ-
55
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure H
Charitable Remainder Annuity Trusts: Distributions, Filing Years 2005 and 2006
[Money amounts are in thousands of dollars]
All returns Item 2005 (1) Total distributions [2] Ordinary income [3] Short-term capital gains [4] Long-term capital gains [5] Nontaxable income [6] Corpus [7] 1,002,261 227,475 28,789 433,026 33,414 279,556 2006 (2) 1,232,106 272,509 29,389 565,694 34,056 330,457 Percent change (3) 22.9 19.8 2.1 30.6 1.9 18.2 2005 (4) 790,468 206,343 24,541 387,686 31,375 140,523
Ongoing returns [1] 2006 (5) 747,930 208,577 20,469 356,736 32,073 130,074 Percent change (6) -5.4 1.1 -16.6 -8.0 2.2 -7.4
[1] This category includes only returns that did not make initial or final distributions during the filing year. [2] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [3] Reported on Form 5227, Part III, column (a). [4] Reported on Form 5227, Part III, column (b). [5] Reported on Form 5227, Part III, column (c). [6] Reported on Form 5227, Part III, column (d). [7] Reported on Form 5227, Part III, column (e). NOTE: Detail may not add to totals due to rounding.
Figure I
[Money amounts are in thousands of dollars]
Charitable Remainder Annuity Trusts: Distributions, by Beneficiary and Income Type, Filing Year 2006
Beneficiary type Total distributions [1] (1) 1,232,106 589,314 149,545 323,934 169,313 Ordinary income [2] (2) 272,509 162,358 45,142 57,984 7,026 Short-term capital gains [3] (3) 29,389 18,054 3,691 7,320 * 323 Long-term capital gains [4] (4) 565,694 282,115 61,633 156,811 65,135 Nontaxable income [5] (5) 34,056 21,503 10,676 * 1,259 * 618 Corpus [6] (6) 330,457 105,284 28,403 100,559 96,212
All beneficiary types Grantor Other individual Charity Noncharitable entity
* Estimate should be used with caution because of the small number of sample returns on which it is based. [1] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [2] Reported on Form 5227, Part III, column (a). [3] Reported on Form 5227, Part III, column (b). [4] Reported on Form 5227, Part III, column (c). [5] Reported on Form 5227, Part III, column (d). [6] Reported on Form 5227, Part III, column (e). NOTE: Detail may not add to totals due to rounding.
56
uals were the recipients of only 13.7 percent and 12.1 percent of distributions for Filing Year 2006, respectively. Corpus distributions made up the majority, or 56.8 percent, of distributions to noncharitable entities. Long-term capital gains made up the largest percentage of distributions to all other beneficiary types. Approximately $9.0 billion in assets were reported for charitable remainder annuity trusts in Filing Year 2006 (Figure J). The allocation of assets in the investment portfolios of trusts filing in 2006 mirrors
that in 2005. Investments comprised the largest portion of assets, more than $7.8 billion, or 86.7 percent of the total. Corporate stock made up 50.6 percent of the total investments reported and comprised the largest portion of the investment portfolio for all sizes of CRATs. Investments in land, buildings, and equipment comprised the smallest portion of the investment portfolio. Figure J also shows that $166.2 million in liabilities were reported for CRATs in Filing Year 2006, an increase of 15.2 percent from 2005.
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure J
Charitable Remainder Annuity Trusts: Investment Allocations, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Total Item Amount (1) Total book value of assets at end of year Total investments U.S. and State government obligations [2] Corporate stock [3] Corporate bonds [4] Land, buildings, and equipment [5] Other investments [6] Total book value of liabilities at end of year
N/A—Not applicable. [1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part IV, line 32a, column (b). [3] Taken from Form 5227, Part IV, line 32b, column (b). [4] Taken from Form 5227, Part IV, line 32c, column (b). [5] Taken from Form 5227, Part IV, line 33, column (b). [6] Taken from Form 5227, Part IV, line 34, column (b). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
Under $500,000 [1] Percent of total investments (4) N/A 100.0 13.9 54.2 15.1 1.2 15.6 N/A
$500,000 under $3,000,000 Percent of total investments (6) N/A 100.0 21.5 48.7 16.8 0.9 12.1 N/A
$3,000,000 or more Percent of total investments (8) N/A 100.0 18.2 50.5 14.7 1.2 15.3 N/A
Percent of total investments (2) N/A 100.0 18.6 50.6 15.6 1.1 14.1 N/A
Amount (3) 1,910,724 1,666,546 231,652 903,241 251,110 19,824 260,720 46,287
Amount (5) 3,629,955 3,176,497 683,500 1,545,671 533,294 28,286 385,746 91,064
Amount (7) 3,500,496 2,991,540 545,192 1,511,684 440,302 35,587 458,775 28,829
9,041,175 7,834,583 1,460,344 3,960,596 1,224,705 83,696 1,105,241 166,179
Charitable Remainder Unitrusts The number of Forms 5227 filed for charitable remainder unitrusts in 2006 was 94,767, virtually unchanged from 2005. As in 2005, the majority of returns filed in 2006 were for small CRUTs with less than $500,000 in end-of-year book value of assets. In Filing Year 2006, about $9.1 billion in total net income were reported for charitable remainder unitrusts (Figure K). Net long-term capital gains comprised the largest portion of the income, with $6.6 billion reported, and increase of 20.1 percent from Filing Year 2005. Nontaxable income made up the smallest portion of income for all categories of CRUTs, accounting for only 1.0 percent of total income for all CRUTs. Returns filed for charitable remainder unitrusts in 2006 reported $60.9 billion in total accumulations, an increase of only 2.2 percent over Filing Year 2005 (Figure L). Total accumulations included $51.7 billion in prior-year undistributed income. Undistributed income at the end of the tax year reported for CRUTs totaled $55.3 billion in 2006, a slight increase from Filing Year 2005.
Charitable remainder unitrust distributions are shown in Figure M. During Filing Year 2006, nearly $6.0 billion in distributions were reported. Of this, large CRUTs, which made up just 3.7 percent of all CRUTs in 2006, accounted for $2.6 billion or 43.2 percent of total distributions that year, an increase from 2005 filings. In contrast, small CRUTs, which made up 70.0 percent of the CRUT filing population in 2006, reported distributions making up 23.4 percent of the total. The dollar value of distributions reported for small CRUTs decreased by 34.0 percent, from $2.1 billion in 2005 to $1.4 billion in 2006. Long-term capital gains remained the largest source of all distributions, accounting for 51.1 percent of all distributions made by charitable remainder unitrusts. Reported distributions from short-term capital gains increased by 48.6 percent, from $342.6 million in Filing Year 2005 to $509.2 million in Filing Year 2006. Nontaxable income contributed the smallest share to distributions for all CRUTs that filed in 2006, making up only 0.7 percent of total distributions. Overall distributions from CRUTs decreased by 6.0 percent between 2005 and 2006. Figure N
57
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure K
Charitable Remainder Unitrusts: Income and Deductions, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net income [2] Net ordinary income [3] Total ordinary income Deductions allocable to ordinary income Net short-term capital gains or (losses) [4] Net long-term capital gains or (losses) [5] Nontaxable income [6] 94,767 9,137,976 2,190,193 2,683,840 493,645 269,222 6,590,653 87,908 Under $500,000 [1] (2) 66,187 951,868 317,518 419,189 101,670 33,639 589,059 11,651 $500,000 under $3,000,000 (3) 25,090 2,493,192 674,358 852,292 177,934 77,242 1,708,597 32,994 $3,000,000 or more (4) 3,489 5,692,916 1,198,317 1,412,359 214,042 158,341 4,292,996 43,263
[1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Calculated as the sum of "ordinary income less deductions" (Form 5227, Part I, line 13), "net short-term capital gains (losses)" (line 16), "net long-term capital gains (losses)" (line 19), and "current tax year nontaxable income" (Part II, line 21 (d)). [3] Taken from "ordinary income less deductions" (Form 5227, Part I, line 13). This amount may not equal "total ordinary income" (line 8) less "total deductions allocable to ordinary income" (line 12) due to taxpayer reporting discrepancies. [4] Taken from Form 5227, Part I, line 16. [5] Taken from Form 5227, Part I, line 19. [6] Taken from Form 5227, Part II, line 21(d). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
Figure l
Charitable Remainder Unitrusts: Accumulation Information, by Type of Income, Filing Year 2006
[Money amounts are in thousands of dollars]
Type of income Item Total Net ordinary income (2) 5,222,659 3,032,466 2,190,193 3,404,240 Capital gains (losses) Net short-term (3) 1,846,745 1,402,833 269,222 1,347,569 Net long-term (4) 53,374,126 46,958,163 6,590,653 50,119,516 Nontaxable income (5) 427,234 339,325 87,908 382,250
(1) Total accumulations [1] Prior-year undistributed [2] Current-year accumulations [3] Undistributed at end of tax year [4]
[1] [2] [3] [4] Taken from Form 5227, Part II, line 22. Taken from Form 5227, Part II, line 20. Taken from Form 5227, Part II, line 21. Taken from Form 5227, Part II, line 23.
60,870,765 51,732,788 9,137,976 55,253,576
NOTES: Detail may not add to totals due to rounding. Additionally, the total accumulations for capital gains (losses) may be skewed due to netting short- and long-term values together.
58
presents distribution data for ongoing CRUTs. These data show that distributions increased by 9.8 percent between the 2 years for ongoing trusts, which starkly contrasts the overall change. Figure O presents the allocation of distributions reported for charitable remainder unitrusts in 2006 among basic beneficiary types. Grantors received $4.4 billion, or 73.2 percent of distributions reported for charitable remainder
unitrusts in 2006. The second most common beneficiary type was nongrantor individuals, who received $940.7 million in distributions. Noncharitable entities were the least common beneficiary of CRUTs, receiving 3.8 percent of all distributions. Charitable remainder unitrust returns filed in 2006 reported $81.1 billion for end-of-year book value of assets (Figure P). Approximately 88.4 per-
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure M
Charitable Remainder Unitrusts: Distributions, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item All (1) Number of returns Total distributions [2] Ordinary income [3] Short-term capital gains [4] Long-term capital gains [5] Nontaxable income [6] Corpus [7] 94,767 5,978,298 1,829,156 509,175 3,052,897 41,725 545,345 Under $500,000 [1] (2) 66,187 1,399,891 341,779 40,103 714,423 10,987 292,599 $500,000 under $3,000,000 (3) 25,090 1,998,663 646,733 105,171 1,067,428 18,059 161,273 $3,000,000 or more (4) 3,489 2,579,744 840,644 363,900 1,271,047 12,678 91,474
[1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [3] Reported on Form 5227, Part III, column (a). [4] Reported on Form 5227, Part III, column (b). [5] Reported on Form 5227, Part III, column (c). [6] Reported on Form 5227, Part III, column (d). [7] Reported on Form 5227, Part III, column (e). NOTE: Detail may not add to totals due to rounding.
Figure n
Charitable Remainder Unitrusts: Distributions, Filing Years 2005 and 2006
[Money amounts are in thousands of dollars]
All returns Item 2005 (1) Total distributions [2] Ordinary income [3] Short-term capital gains [4] Long-term capital gains [5] Nontaxable income [6] Corpus [7] 6,358,763 1,706,843 342,579 3,706,584 44,359 558,398 2006 (2) 5,978,298 1,829,156 509,175 3,052,897 41,725 545,345 Percent change (3) -6.0 7.2 48.6 -17.6 -5.9 -2.3 2005 (4) 5,005,945 1,668,673 336,840 2,621,214 38,352 340,866
Ongoing returns [1] 2006 (5) 5,497,046 1,790,616 497,745 2,823,939 37,470 347,276 Percent change (6) 9.8 7.3 47.8 7.7 -2.3 1.9
[1] This category includes only returns that did not make initial or final distributions during the filing year. [2] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [3] Reported on Form 5227, Part III, column (a). [4] Reported on Form 5227, Part III, column (b). [5] Reported on Form 5227, Part III, column (c). [6] Reported on Form 5227, Part III, column (d). [7] Reported on Form 5227, Part III, column (e). NOTE: Detail may not add to totals due to rounding.
cent of the asset value was made up of investments, reported to be $71.7 billion. As in prior years, corporate stock, a reported $37.6 billion, comprised the majority of the investment portfolio of CRUTs in 2006. The second most common component of the 2006 Filing Year portfolio was other investments, which include partnerships, annuities, and bonds
issued by foreign governments. Real estate investments were the smallest component of investments for CRUTs of all sizes. Overall, CRUT returns reported $1.2 billion in liabilities during the filing year. In Filing Year 2006, some 2,236, or 2.4 percent of all CRUTs, reported $791.9 million in additional contributions (Figure Q). This is a decrease from
59
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure O
[Money amounts are in thousands of dollars]
Charitable Remainder Unitrusts: Distributions, by Beneficiary and Income Type, Filing Year 2006
Beneficiary type Total distributions [1] (1) Ordinary income [2] (2) 1,829,156 1,346,541 363,059 58,450 61,106 Short-term capital gains [3] (3) 509,175 388,341 54,966 1,478 64,390 Long-term capital gains [4] (4) 3,052,897 2,342,134 404,920 227,153 78,691 Nontaxable income [5] (5) 41,725 27,073 11,276 3,235 * 140 Corpus [6] (6) 545,345 271,049 106,432 143,048 24,816
All beneficiary types Grantor Other individual Charity Noncharitable entity
5,978,298 4,375,138 940,653 433,364 229,143
* Estimate should be used with caution because of the small number of sample returns on which it is based. [1] May include distributions made after December 31 of the tax year and therefore may not be reflected on the accumulation schedule. [2] Reported on Form 5227, Part III, column (a). [3] Reported on Form 5227, Part III, column (b). [4] Reported on Form 5227, Part III, column (c). [5] Reported on Form 5227, Part III, column (d). [6] Reported on Form 5227, Part III, column (e). NOTE: Detail may not add to totals due to rounding.
Figure P
Charitable Remainder Unitrusts: Investment Allocations, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Total Item Amount (1) Total book value of assets at end of year Total investments U.S. and State government obligations [2] Corporate stock [3] Corporate bonds [4] Land, buildings, and equipment [5] Other investments [6] Total book value of liabilities at end of year 81,121,949 71,700,498 4,840,546 37,616,254 7,729,408 749,432 20,764,857 1,191,868 Percent of total investments (2) N/A 100.0 6.8 52.5 10.8 1.0 29.0 N/A Under $500,000 [1] Amount (3) 12,048,950 10,370,099 535,161 6,646,864 1,498,396 74,364 1,615,315 151,973 Percent of total investments (4) N/A 100.0 5.2 64.1 14.4 0.7 15.6 N/A $500,000 under $3,000,000 Amount (5) 26,716,472 23,436,091 1,720,481 14,948,250 3,043,050 273,129 3,451,181 376,152 Percent of total investments (6) N/A 100.0 7.3 63.8 13.0 1.2 14.7 N/A $3,000,000 or more Amount (7) 42,356,527 37,894,308 2,584,905 16,021,140 3,187,962 401,940 15,698,362 663,743 Percent of total investments (8) N/A 100.0 6.8 42.3 8.4 1.1 41.4 N/A
N/A—Not applicable. [1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part IV, line 32a, column (b). [3] Taken from Form 5227, Part IV, line 32b, column (b). [4] Taken from Form 5227, Part IV, line 32c, column (b). [5] Taken from Form 5227, Part IV, line 33, column (b). [6] Taken from Form 5227, Part IV, line 34, column (b). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
60
Filing Year 2005 when 3,086 returns filed for CRUTs reported additional contributions of $943.5 million. Because they dominate the population, small CRUTs reported the largest quantity of additional contributions, however large CRUTs were reported to receive
the largest dollar value of additional contributions. As in Filing Year 2005, stocks were the most common type of asset contributed, composing 67.5 percent of all contributions reported in 2006. Contributions of other assets, including insurance, art, and
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure Q
Charitable Remainder Unitrusts: Additional Contributions, by Type and Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Number of returns with additional contributions Total additional contributions [2] Cash and money market accounts Stocks [3] Bonds Real estate [4] Other assets [5] 94,767 2,236 791,892 97,111 534,776 * 13,529 * 25,734 120,741 Under $500,000 [1] (2) 66,187 1,379 62,427 18,252 31,701 ** 486 ** 11,988 $500,000 under $3,000,000 (3) 25,090 743 257,459 54,212 114,301 0 * 23,348 65,598 $3,000,000 or more (4) 3,489 114 472,007 24,647 388,775 ** 15,429 ** 43,155
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often these zero amounts are explained by trusts filing a final return. [2] The values for additional contributions are taken from attachments to the Form 5227. [3] The value of stock includes both publicly traded and closely held stocks. [4] The value given for real estate includes traditional real estate, as well as real estate mutual funds and partnerships. [5] Other assets includes such items as retirement assets, annuities, partnerships, insurance assets, and art. NOTE: Detail may not add to totals due to rounding.
retirement assets, were reported to be $120.7 million. Additional contributions of bonds were reported to be $13.5 million, making them the least common asset contributed to CRUTs in 2006.
Pooled Income Funds
Charitable lead trusts
Trustees filed returns for 6,298 charitable lead trusts in 2006, a 2.1-percent increase from the number filed in 2005. CLT returns filed in 2006 reported $1.1 billion in distributions (Figure R). Of this total, more than 99.3 percent were required payments for charitable purposes, while only $7.4 million were required payments to private beneficiaries. Figure R also shows that $16.5 billion in end-of-year total assets were reported for charitable lead trusts in Filing Year 2006, a nearly $1.0 billion increase from 2005. Investments made up 88.0 percent, or $14.5 billion, of total assets. In contrast to 2005, corporate stock was not the largest component of all investments for all sizes of CLTs. The investment portfolios of large CLTs were dominated by other investments in 2006. Land, buildings, and equipment investments made up the smallest share of CLT investments overall. CLTs claimed $496.5 million in total liabilities.
The number of Forms 5227 filed for pooled income funds remained stable from 2005 to 2006, increasing by only one return. In Filing Year 2006, PIFs reported distributions of $121.8 million, a decrease of 4.3 percent from 2005 (Figure S). The majority of distributions were distributions to private beneficiaries, reported to be $58.2 million in Filing Year 2006. Of the $1.6 billion in end-of-year total assets reported for PIFs, $1.4 billion, or 89.8 percent, were investments. Overall, as in 2005, corporate bonds made up the largest portion of investments reported for PIFs, $471.6 million in 2006. However, for both large and small pooled income funds, corporate stock was the largest component of reported investments. Pooled income funds claimed $115.8 million in liabilities for Filing Year 2006.
Summary
Overall, split-interest trust filing statistics stabilized between Filing Years 2005 and 2006. The number of Forms 5227 filed in 2006 was only 0.2 percent less than the number filed in 2005. End-of-year book value of assets increased by 1.6 percent, and investments increased by 3.1 percent. In 2006, the
61
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure R
Charitable Lead Trusts: Distributions and Investment Allocations, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total distributions [2] Required payments for charitable purposes Required payments to private beneficiaries Total book value of assets at end of year Total investments [3] U.S. and State government obligations [4] Corporate stock [5] Corporate bonds [6] Land, buildings, and equipment [7] Other investments [8] Total book value of liabilities at end of year 6,298 1,058,070 1,050,716 * 7,353 16,485,658 14,509,019 650,227 6,756,726 712,678 143,111 6,246,277 496,529 Under $500,000 [1] (2) 2,724 83,047 ** 83,047 ** 541,074 463,618 53,894 288,666 25,211 ** 95,847 ** 22,329 $500,000 under $3,000,000 (3) 2,741 257,846 ** 257,846 ** 3,344,923 2,996,800 180,839 1,793,983 204,639 ** 817,339 ** 88,279 $3,000,000 or more (4) 833 717,177 712,904 * 4,273 12,599,661 11,048,601 415,494 4,674,077 482,828 94,301 5,381,902 385,922
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] "Total distributions" are calculated as the sum of "excess income required to be paid for charitable purposes" (line 2), "annuity or unitrust payment required to be paid to charitable beneficiaries" (line 3), and "annuity or unitrust payments required to be paid to private beneficiaries" (line 4) from Form 5227, Part VII, Section A, the Questionnaire for Charitable [3] Investments are reported as a portion of assets on Form 5227, Part IV, column (b). [4] Taken from Form 5227, Part IV, line 32a, column (b). [5] Taken from Form 5227, Part IV, line 32b, column (b). [6] Taken from Form 5227, Part IV, line 32c, column (b). [7] Taken from Form 5227, Part IV, line 33, column (b). [8] Taken from Form 5227, Part IV, line 34, column (b). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
reported end-of-year book value of liabilities was 4.7 percent larger than the amount reported in 2005. In many ways, these are the most stable Forms 5227 filing statistics in recent years. Between Filing Years 2004 and 2005, total net income reported increased by 67.4 percent. End-of-year book value of assets increased by 5.7 percent between 2004 and 2005. The lack of striking change between Filing Years 2005 and 2006 may be attributed, in part, to an absence of new tax law revisions affecting split-interest trusts. By trust type, however, some substantive change can be observed. In 2006, distributions reported for charitable remainder annuity trusts were 22.9 percent higher than those reported for Filing Year 2005. The value of additional contributions reported on returns for charitable remainder unitrusts fell 16.1 percent from 2005 to 2006. The end-of-year book value of liabilities reported for charitable lead trusts increased 24.4 percent between Filing Years 2005 and 2006.
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Data Sources and limitations
The data presented in this article were collected from a sample of Forms 5227, Split-Interest Trust Information Returns, from Filing Year 2006. A filing year includes returns received by IRS for processing between January 1 and December 31 of a given year. A filing year file is primarily comprised of returns for the tax year immediately prior, however it may include late-filed returns for numerous other tax years. For Filing Year 2006, approximately 98.2 percent of returns included in the sample were for Tax Year 2005, while Tax Year 2004 returns comprised 1.4 percent of the sampled returns. Partial year returns, for either initial or final reporting periods, were included in the SOI sample. All returns included in the sample were computerdesignated at the IRS Ogden Submission Processing Center after posting to the IRS Master File. For Filing Year 2006, a sample of 12,467 returns was drawn from an estimated population of 124,632
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure S
Pooled Income Funds: Distributions and Investment Allocations, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[Money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total distributions [2] Amount required to be distributed to satisfy remainder interest [3] Amount required to be distributed to private beneficiaries [4] Amount required to be distributed to charitable remainder beneficiary [5] Less: Undistributed required payments for charitable purposes [4] Total book value of assets at end of year Total investments [7] U.S. and State government obligations [8] Corporate stock [9] Corporate bonds [10] Other investments [11] Total book value of liabilities at end of year 1,676 121,847 69,353 58,161 731 6,398 1,599,610 1,437,245 231,772 460,045 471,621 273,807 115,837 Under $500,000 [1] (2) 1,345 14,309 11,874 4,842 313 * 2,720 149,525 108,784 13,030 36,097 35,561 24,095 * 393 $500,000 under $3,000,000 (3) 221 18,578 8,945 10,087 152 * 606 270,824 237,170 29,588 59,194 128,032 20,356 * 855 $3,000,000 or more (4) 110 88,960 48,533 43,232 266 * 3,072 1,179,260 1,091,291 189,154 364,753 308,028 229,356 114,589
* Estimate should be used with caution because of the small number of sample returns on which it is based. [1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Distributions were calculated as the "amount required to be distributed to satisfy the remainder interest" (Form 5227, Part VII, Section B, line 2), plus the "amount of income required to be paid to the private beneficiaries" (line 4), plus the "amount of income required to be paid to the charitable remainder beneficiary" (line 5), less the "amounts that were required to be distributed to the remainder beneficiary that remain undistributed" (line 3). [3] Taken from Form 5227, Part VII, Section B, line 2. [4] Taken from Form 5227, Part VII, Section B, line 4. [5] Taken from Form 5227, Part VII, Section B, line 5. [6] Taken from Form 5227, Part VII, Section B, line 3. [7] Investments are reported as a portion of assets on Form 5227, Part IV, column (b). [8] Taken from Form 5227, Part IV, line 32a, column (b). [9] Taken from Form 5227, Part IV, line 32b, column (b). [10] Taken from Form 5227, Part IV, line 32c, column (b). [11] Other investments includes values taken from Form 5227, Part IV, line 33, column (b), as well as values from line 34, column (b). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
trusts that filed Form 5227. The sample size excludes returns that were selected for the sample but later rejected. Returns could be rejected if they were not one of the four types of trusts included in the study or if no money amounts were reported. The sample was stratified by the type of the trust (charitable remainder annuity trust, charitable remainder unitrust, charitable lead trust, or pooled income fund) and the reported book value of end-of-year total assets. The asset strata were: total assets of less than $1.0 million, $1.0 million to less than $10.0 million, and more than $10.0 million. Beginning in Filing Year 2006, the sample no longer includes a fourth asset category that included all trusts that reported end-of-year book value of total assets as less than $10.0 million, but reported end-of-year fair market value of total assets in excess of $50.0 million. In total, there are 12 strata. There were 21,333 chari-
table remainder annuity trusts, which were sampled at rates ranging from 6.2 percent (for the smallest) to 100.0 percent (for the largest), resulting in a sample of 2,088 returns. There were 95,291 charitable remainder unitrusts, sampled at rates from 4.9 percent to 100.0 percent, creating a sample of 9,532 returns. There were 6,332 charitable lead trusts, from which a sample of 661 was drawn. Lead trusts were sampled at rates ranging from 3.3 percent to 100.0 percent. There were 1,676 pooled income funds, of which 1,869 were included in the sample. Pooled income funds had sample rates from 4.8 percent to 100.0 percent. The magnitude of sampling error for selected items, measured by coefficients of variation, is shown in Figure T. All samples were designed to provide reliable estimates of financial activity. All data were collected from original returns as they were filed. All
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Figure t
Coefficients of Variation for Selected Items, by Type of Split-Interest Trust and Size of End-of-Year Book Value of Total Assets, Filing Year 2006
Size of end-of-year book value of total assets Item Total Under $500,000 [1] $500,000 under $3,000,000 (3) 1.18 7.19 32.61 14.42 3.47 23.13 0.76 4.95 15.97 7.15 1.47 1.89 12.16 6.19 10.33 41.49 98.31 23.59 2.93 11.65 49.84 16.01 5.03 7.79 22.79 12.57 3.95 36.17 1.96 2.49 10.42 4.25 1.39 1.51 7.78 6.30 4.75 28.01 79.59 10.27 18.28 10.50 49.83 13.02 $3,000,000 or more
Coefficient of variation (percentage) (1) Charitable remainder annuity trusts Number of returns Net ordinary income [2] Net short-term capital gains or (losses) [3] Net long-term capital gains or (losses) [4] End-of-year total assets (book value) [5] End-of-year total liabilities (book value) [7] Charitable remainder unitrusts Number of returns Net ordinary income [2] Net short-term capital gains or (losses) [3] Net long-term capital gains or (losses) [4] End-of-year total assets (book value) [5] End-of-year total assets (fair market value) [6] End-of-year total liabilities (book value) [7] Charitable lead trusts Number of returns End-of-year total assets (book value) [5] End-of-year total liabilities (book value) [7] Required payments to private beneficiaries [8] Required payments for charitable purposes [9] Pooled income funds Number of returns End-of-year total assets (book value) [5] End-of-year total liabilities (book value) [7] Required payment to private beneficiaries [8] 0.57 3.53 12.80 6.55 1.70 20.97 0.15 1.14 5.15 1.61 0.49 0.55 4.19 0.91 1.43 8.77 34.26 3.83 2.33 2.83 0.91 3.79 (2) (4) 4.07 3.25 11.44 8.85 2.44 15.31 1.73 1.07 6.30 1.60 0.77 0.75 5.47 5.84 2.23 9.10 22.99 4.05 8.05 4.18 0.83 4.92
[1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part I, line 13. [3] Taken from Form 5227, Part I, line 16. [4] Taken from Form 5227, Part I, line 19. [5] Taken from Form 5227, Part IV, line 37, column (b). [6] For charitable remainder unitrusts, taken from an estimated end-of-year fair market value. [7] Taken from Form 5227, Part IV, line 43, column (b). [8] In the case of charitable lead trusts, this value is based on the amount on Form 5227, Part VII, Section A, line 4. In the case of pooled income funds, this value is based on the amount on Form 5227, Part VII, Section B, line 4. [9] Taken from Form 5227, Part VII, Section A, line 3.
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edited returns were subjected to comprehensive testing and data verification procedures to ensure the highest quality of data. Changes that were made to the return after filing, either by the taxpayer (on an amended return) or during IRS processing, were not generally incorporated. A complete discussion of the reliability of estimates based on samples, methods for evaluating the magnitude for both sampling and nonsampling error, and the precision of the sample estimates can be found in the Appendix in this issue of the SOI Bulletin.
explanation of Selected terms
Annuity trust—An annuity trust is a trust in which the payments for the duration of the trust, either to a private or charitable beneficiary, are of a fixed amount. In the context of this article, an annuity trust can be either a charitable remainder trust (with a private income beneficiary) or charitable lead trust (with a charitable income beneficiary). The payment amount is determined by multiplying a specified percentage by the fair market value of the assets initially placed in the trust.
Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Beneficiary(ies)—Beneficiary(ies) refers to the person, persons, or organization that receives payments or assets from a trust. Recipient is used interchangeably with beneficiary. Beneficiaries can be either charitable or noncharitable (private), and can be either an income beneficiary or a remainder beneficiary. Book value—Book value is generally the cost basis of an asset, or the price at which an asset is acquired. All trusts must report the beginning- and end-of-year book value of their assets on Part IV, Balance Sheet, Columns A and B, of Form 5227. All book value amounts referred to in this article are endof-year book value amounts. Charitable lead trust (CLT)—Charitable lead trusts are split-interest trusts in which a designated charitable organization receives an income stream from the assets in trust; one or more private beneficiaries receive the remainder interest of the trust. Charitable lead trusts can be classified as either grantor or nongrantor lead trusts, and payments can be made on an annuity basis or a unitrust basis. Charitable remainder annuity trust (CRAT)—A charitable remainder annuity trust is a charitable remainder trust in which the income payments to the private beneficiary are fixed. The payment amount is calculated by multiplying the designated percentage by the fair market value of the assets initially placed in the trust. Charitable remainder trust (CRT)—Charitable remainder trusts are split-interest trusts in which a private, or noncharitable beneficiary receives a stream of income for the duration of the trust, and a designated charity receives the remainder interest of the trust. Charitable remainder trusts can be either annuity trusts or unitrusts, depending on the method used to calculate the payment amounts. Further, unitrusts can be of the net income or net income with makeup variety. Charitable remainder unitrust (CRUT)—A charitable remainder unitrust is a charitable remainder trust in which the income payments to the private beneficiary fluctuate with the annual value of the assets in the trust. The payment amount is calculated by multiplying the designated percentage by the fair market value of the assets as they are valued each year. Unitrusts can have net income or net income with makeup provisions. Charity or charitable organization—A charity, or charitable organization, refers to a tax-exempt
organization with purposes that are charitable, educational, scientific, literary, or religious in nature, or that otherwise qualifies as a 501(c) (3) organization. Donor—A donor, also referred to as a grantor or contributor, is the individual who transfers personal assets into the trust or fund. Fair market value—Fair market value is defined, for the purposes of this article, as the market price of the asset (or liability) as of a certain point in time. The fair market value of assets and liabilities is reported by charitable remainder unitrusts in Part IV, Balance Sheet, Column C, of Form 5227. Grantor charitable lead trust—Charitable grantor lead trusts name the donor (grantor) as the remainder beneficiary. In establishing a grantor lead trust, the donor is entitled to an income tax deduction for the year in which the trust was created, but he or she must also pay taxes on the income generated by the trust’s assets. The income generated is paid to a designated charitable beneficiary. Income beneficiary—The income beneficiary of a split-interest trust is the recipient of the stream of payments made over the duration of the trust. The income beneficiary of charitable remainder trusts and pooled income funds is the private (noncharitable) beneficiary; in charitable lead trusts, the income beneficiary is the designated charitable organization. Income interest—Income interest refers to the right to receive payments made to beneficiaries during the life of the trust. Income interest is paid to the income beneficiary. Investments—Investments refer to the sum of “Government obligations” (line 32a); “corporate stock” (line 32b); “corporate bonds” (line 32c); “land, buildings, and equipment that is not held for charitable purposes” (line 33); and “other investments” (line 34) reported on Form 5227. Net income charitable remainder unitrust (NICRUT)—Net income charitable remainder unitrusts are charitable remainder unitrusts that allow the annual payment to the private beneficiary to be the lesser of either the unitrust amount or the trust’s net income. Net income with makeup charitable remainder unitrusts (NIM-CRUT)—Net income with makeup charitable remainder unitrusts are charitable remainder unitrusts that allow the annual payment to the private beneficiary to be the lesser of either the unitrust amount or the trust’s net income. Deficiencies in the distributions, which occur when the net income is
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
less than the unitrust payment amount, are then made up in subsequent years when the net income of the trust is greater than the unitrust amount. Nongrantor charitable lead trust—Charitable nongrantor lead trusts name as the remainder beneficiary a recipient other than the grantor (donor). Usually, the remainder beneficiary is a child or grandchild of the grantor. Ordinary income—Ordinary income is income from the following sources: interest; dividends; business income; rents, royalties, partnerships, and other estates and trusts; farm income; ordinary gain; and “other income.” Ordinary income is reported in Part I, Ordinary Income, of Form 5227. Pooled income fund (PIF)—A pooled income fund is a fund established and maintained by a charity to invest and manage assets donated by multiple donors. Income from the assets is distributed annually on a prorated basis to the named beneficiaries. Upon the termination of an income interest, due to the death of one of the beneficiaries, a prorated part of the basis of the fund is removed and given to the charity. Remainder beneficiary—The remainder beneficiary of a split-interest trust is the recipient of the trust’s assets at the conclusion of the trust. In the case of charitable remainder trusts, the remainder beneficiary is the selected charity; in charitable lead trusts, the remainder beneficiary is the designated private beneficiary. Remainder interest—The remainder interest of a trust is the right to receive assets remaining at the conclusion of the trust, after all liabilities have been settled and prior payments to beneficiaries have been made. This interest is then distributed to the remainder beneficiary.
Securities—Securities refer to the sum of “Government obligations” (line 32a); “corporate stock” (line 32b); and “corporate bonds” (line 32c) reported on Form 5227. Short-term investments—Short-term investments are securities that mature in 1 year or less. Treasury bills and short-term corporate notes are common examples of a short-term investment. Split-interest trust—A split-interest trust, according to the 2006 Instructions for Form 5227, is a trust that “is not exempt from tax under Internal Revenue Code section 501(a); has some unexpired interests that are devoted to purposes other than religious, charitable, or similar purposes described in Code 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 Code sections listed in section 4947(a)(2).” Trust—A trust is a legal arrangement between its creator (donor or grantor), the manager of the trust (trustee), and the beneficiary or beneficiaries of the trust. Trusts are legal entities in their own right, and can be responsible for any tax liabilities separate from the liabilities of the grantor and beneficiary. The conditions and provisions of a trust are defined in the trust document. Unitrust—A unitrust is a trust in which the income interest, paid either to a private or charitable beneficiary, varies with the annual fair market value of the total assets of the trust in a given year. In the context of this article, a unitrust can be either of the charitable remainder trust (with income payments to a private beneficiary) or charitable lead trust (with income payments to a charitable beneficiary) variety. The payment amount is determined by multiplying a specified percentage by the fair market value of the assets of the trust as they are valued annually.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 1. Charitable Remainder Annuity Trusts: Income and Deductions, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total Zero or not reported (2) 1,115 30,757 4,884 7,040 3,431 3,527 * 82 2,156 0 [10] 2,156 3,126 3,298 173 21,913 22,380 466 834 $1 under $500,000 (3) 16,365 128,113 48,739 63,481 21,369 33,717 8,394 14,742 * 404 20 14,318 2,260 2,573 313 69,185 71,342 2,157 7,929 $500,000 under $1,000,000 (4) 2,123 143,689 40,801 50,041 14,505 25,610 9,926 9,240 ** 47 ** 9,193 2,821 2,874 53 91,807 92,935 1,127 8,259 $1,000,000 under $3,000,000 (5) 1,294 174,354 51,478 63,659 23,731 31,004 8,924 12,181 244 153 11,784 3,237 3,447 210 109,847 111,339 1,492 9,793 $3,000,000 under $10,000,000 (6) 316 172,194 36,990 45,188 16,932 22,762 5,494 8,197 * 148 68 7,981 1,517 1,679 162 124,481 125,312 831 9,206 $10,000,000 or more (7) 83 204,863 52,386 59,873 26,147 31,774 1,952 7,487 ** 34 ** 7,453 5,544 5,569 * 25 143,487 144,368 881 3,446
(1) Number of returns Total net income [1] Net ordinary income [2] Total ordinary income [3] Interest income Dividends and business income (loss) Other income [4] Total deductions [5] Interest Taxes Other deductions Net short-term capital gains or (losses) [6] Total short-term capital gains or (losses) Deductions allocable to short-term capital gains or (losses) Net long-term capital gains or (losses) [7] Total long-term capital gains or(losses) [8] Deductions allocable to long-term capital gains or (losses) Nontaxable income [9] 21,296 853,971 235,279 289,283 106,116 148,395 34,771 54,003 813 305 52,885 18,504 19,440 936 560,720 567,676 6,955 39,468
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Calculated as the sum of "net ordinary income" (Form 5227, Part I, line 13), "net short-term capital gains (losses)" (line 16), "net long-term capital gains (losses)" (line 19), and "current tax year nontaxable income" (Part II, line 21(d)). [2] Taken from "net ordinary income" (Form 5227, Part I, line 13). This amount may not equal "total ordinary income" (line 8) less "total deductions allocable to ordinary income" (line 12) due to taxpayer discrepancies. [3] Taken from Form 5227, Part I, line 8. [4] Calculated as the sum of "rents, royalties, partnerships, other estates, and trusts" (Form 5227, Part I, line 4), "farm income or loss" (line 5), "ordinary gain or loss" (line 6), and "other income" (line 7). [5] Taken from Form 5227, Part I, line 12. [6] Taken from Form 5227, Part I, line 16. [7] Taken from Form 5227, Part I, line 19. [8] Taken from Form 5227, Part I, line 17a. [9] Taken from Form 5227, Part II, line 21(column d). [10] Amount less than $500. NOTE: Detail may not add to totals due to rounding.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 2. Charitable Remainder Annuity Trusts: Accumulation Information, by Size of End-of-Year Book V Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item All (1) Number of returns Total accumulations [2] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income Prior-year undistributed income [3] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income Current-year net income [4] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income Undistributed at end of year [5] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income 21,296 5,407,534 491,620 50,752 4,681,536 183,626 4,553,562 256,341 21,668 4,131,396 144,158 853,971 235,279 18,504 560,720 39,468 4,481,374 219,674 24,213 4,089,062 148,425 Under $500,000 [1] (2) 17,480 1,167,431 128,893 12,213 991,320 35,005 1,008,561 75,270 5,624 901,424 26,242 158,870 53,623 5,385 91,099 8,763 735,850 30,165 -376 681,764 24,297 $500,000 under $1,000,000 (3) 2,123 759,598 60,411 9,037 659,491 30,659 615,909 19,609 4,745 569,155 22,400 143,689 40,801 2,821 91,807 8,259 652,204 26,744 5,658 596,381 23,421 $1,000,000 under $3,000,000 under $3,000,000 $10,000,000 (4) 1,294 1,069,130 92,863 11,036 914,546 50,686 894,776 41,385 3,219 809,279 40,893 174,354 51,478 3,237 109,847 9,793 919,403 36,423 6,686 834,032 42,262 (5) 316 985,132 122,682 6,315 803,372 52,763 812,937 85,691 2,757 680,932 43,557 172,194 36,990 1,517 124,481 9,206 889,367 88,666 2,643 751,922 46,136 $10,000,000 or more (6) 83 1,426,242 86,771 12,152 1,312,806 14,513 1,221,379 34,385 5,323 1,170,605 11,066 204,863 52,386 5,544 143,487 3,446 1,284,550 37,675 9,603 1,224,963 12,309
[1] Includes returns that did not report the end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part II, line 22. [3] Taken from Form 5227, Part II, line 20. [4] Taken from Form 5227, Part II, line 21. [5] Taken from Form 5227, Part II, line 23. NOTE: Detail may not add to totals due to rounding.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 3. Charitable Remainder Annuity Trusts: Book Value Balance Sheet Information, by Size of Endof-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net assets [2] Total liabilities and net assets [3] Total assets [4] Cash Savings and temporary cash investments Receivables due [5] Inventories and prepaid expenses Total investments Securities Government obligations Corporate stock Corporate bonds Land, buildings, and equipment Other investments Charitable purpose land, buildings, and equipment Other assets Total liabilities [6] Accounts payable, accrued expenses, and deferred revenue Other liabilities [7] 21,296 8,874,996 9,041,175 9,041,175 138,244 624,794 155,005 2,457 7,834,583 6,645,645 1,460,344 3,960,596 1,224,705 83,696 1,105,241 44,524 241,564 166,179 29,467 136,712 Under $500,000 [1] (2) 17,480 1,864,437 1,910,724 1,910,724 45,445 119,441 15,094 * 24 1,666,546 1,386,002 231,652 903,241 251,110 19,824 260,720 2,604 61,566 46,287 10,857 35,429 $500,000 under $1,000,000 (3) 2,123 1,521,346 1,528,516 1,528,516 26,517 88,551 8,713 0 1,353,873 1,180,913 260,012 673,557 247,344 0 172,960 50,862 ** 7,170 3,550 3,621 $1,000,000 under $3,000,000 (4) 1,294 2,017,545 2,101,439 2,101,439 32,801 119,088 64,627 * 2,248 1,822,624 1,581,551 423,488 872,114 285,950 28,286 212,787 26,273 33,778 83,894 13,664 70,229 $3,000,000 under $10,000,000 (5) 316 1,526,599 1,543,408 1,543,408 20,917 133,898 ** 9,638 ** 1,357,698 1,196,012 301,687 699,706 194,619 35,586 126,100 2,130 19,126 16,809 629 16,180 $10,000,000 or more (6) 83 1,945,068 1,957,087 1,957,087 12,564 163,816 ** 57,117 ** 1,633,842 1,301,166 243,505 811,978 245,683 0 332,675 89,749 ** 12,019 768 11,252
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report the end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part IV, line 46, column (b). This is the excess of total assets over total liabilities. This value may deviate from the calculated value of total assets (line 37, column (b)) less total liabilities (line 43, column (b)) due to taxpayer reporting discrepancies. [3] Taken from "total liabilities and net assets" (Form 5227, Part IV, line 47, column (b)). This amount may not equal "total liabilities" (line 43, column (b)) plus "total net assets" (line 46, column (b)) due to taxpayer reporting discrepancies. [4] Taken from Form 5227, Part IV, line 37, column (b). [5] Calculated as the sum of "accounts receivable" (Form 5227, Part IV, line 27, column (b)), "receivables due from officers, directors, and other disqualified persons" (line 28, column(b)), and "other notes and loans receivable" (line 29, column (b)). [6] Taken from Form 5227, Part IV, line 43, column (b). [7] Includes "loans from officers, directors, trustees, and other disqualified persons" (Form 5227, Part IV, line 40, column (b)), "mortgages and other notes payable" (line 41, column (b)), and "other liabilities" (line 42, column (b)). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
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Table 4. Charitable Remainder Unitrusts: Income and Deductions, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net income [1] Net ordinary income [2] Total ordinary income [3] Interest income Dividends and business income (loss) Other income [4] Total deductions [5] Interest Taxes Other deductions Net short-term capital gains or (losses) [6] Total short-term capital gains or (losses) Deductions allocable to short-term capital gains or (losses) Net long-term capital gains or (losses) [7] Total long-term capital gains or (losses) [8] Deductions allocable to short-term capital gains or (losses) Nontaxable income [9] 94,767 9,137,976 2,190,193 2,683,840 844,989 1,484,474 354,376 493,645 25,338 6,680 461,627 269,222 633,168 363,945 6,590,653 6,738,271 147,618 87,908 Zero or not reported (2) 2,105 -962 7,960 15,197 6,620 4,685 * 3,892 7,237 ** 11 ** 7,226 3,074 3,209 * 135 -12,619 -12,005 615 * 623 $1 under $500,000 (3) 64,082 952,830 309,557 403,991 103,565 243,728 56,697 94,433 ** 2,577 ** 91,855 30,565 32,592 2,027 601,679 614,611 12,932 11,029 $500,000 under $1,000,000 (4) 15,116 851,011 259,272 331,217 89,960 206,007 35,250 71,944 590 545 70,809 26,299 28,120 1,821 554,934 565,089 10,155 10,506 $1,000,000 under $3,000,000 (5) 9,974 1,642,181 415,086 521,075 152,975 295,404 72,696 105,989 2,690 2,219 101,081 50,943 53,926 2,982 1,153,664 1,170,981 17,317 22,488 $3,000,000 under $10,000,000 (6) 2,743 1,460,514 319,863 397,478 117,383 234,471 45,623 77,614 1,566 1,365 74,683 51,321 53,190 1,870 1,068,504 1,078,664 10,160 20,827 $10,000,000 or more (7) 746 4,232,402 878,454 1,014,881 374,485 500,179 140,217 136,428 18,803 1,652 115,973 107,020 462,130 355,110 3,224,492 3,320,931 96,439 22,436
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Calculated as the sum of "net ordinary income" (Form 5227, Part I, line 13), "net short-term capital gains (losses)" (line 16), "net long-term capital gains (losses)" (line 19), and "current tax year nontaxable income" (Part II, line 21(d)). [2] Taken from "net ordinary income" (Form 5227, Part I, line 13). This amount may not equal "total ordinary income" (line 8) less "total deductions allocable to ordinary income" (line 12) due to taxpayer reporting discrepancies. [3] Taken from Form 5227, Part I, line 8. [4] Calculated as the sum of "rents, royalties, partnerships, other estates, and trusts" (Form 5227, Part I, line 4), "farm income or loss" (line 5), "ordinary gain or loss" (line 6), and "other income" (line 7). [5] Taken from Form 5227, Part I, line 12. [6] Taken from Form 5227, Part I, line 16. [7] Taken from Form 5227, Part I, line 19. [8] Taken from Form 5227, Part I, line 17a. [9] Taken from Form 5227, Part II, line 21(column d). NOTE: Detail may not add to totals due to rounding.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 5. Charitable Remainder Unitrusts: Accumulation Information, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total accumulations [1] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income Prior-year undistributed income [2] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income Current-year net income [3] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income Undistributed at end of year [4] Net ordinary income Net short-term capital gains (losses) Net long-term capital gains (losses) Nontaxable income 94,767 60,870,765 5,222,659 1,846,745 53,374,126 427,234 51,732,788 3,032,466 1,402,833 46,958,163 339,325 9,137,976 2,190,193 269,222 6,590,653 87,908 55,253,576 3,404,240 1,347,569 50,119,516 382,250 Zero or not reported (2) 2,105 384,269 11,386 9,349 358,311 5,222 385,231 3,425 5,753 371,453 4,600 -962 7,960 3,074 -12,619 * 623 137,309 -199 * 708 ** 136,800 ** $1 under $500,000 (3) 64,082 6,961,007 435,289 54,887 6,424,680 46,151 6,008,177 125,731 -30,332 5,877,655 35,122 952,830 309,557 30,565 601,679 11,029 6,026,839 107,752 25,194 ** 5,893,892 ** $500,000 under $1,000,000 (4) 15,116 6,608,965 345,256 101,587 6,118,590 43,532 5,757,954 85,984 63,301 5,575,643 33,026 851,011 259,272 26,299 554,934 10,506 5,875,701 96,268 64,645 5,679,261 35,527 $1,000,000 under $3,000,000 (5) 9,974 11,296,703 620,558 200,091 10,340,394 135,660 9,654,523 205,473 109,819 9,226,059 113,172 1,642,181 415,086 50,943 1,153,664 22,488 10,170,926 230,902 140,388 9,676,430 123,206 $3,000,000 under $10,000,000 (6) 2,743 10,481,994 586,762 200,724 9,581,647 112,862 9,021,480 266,899 110,506 8,552,040 92,035 1,460,514 319,863 51,321 1,068,504 20,827 9,563,593 291,214 144,899 9,021,472 106,007 $10,000,000 or more (7) 746 25,137,826 3,223,408 1,280,108 20,550,504 83,807 20,905,425 2,344,954 1,143,786 17,355,313 61,371 4,232,402 878,454 107,020 3,224,492 22,436 23,479,207 2,678,302 971,735 19,751,077 78,094
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Taken from Form 5227, Part II, line 22. [2] Taken from Form 5227, Part II, line 20. [3] Taken from Form 5227, Part II, line 21. [4] Taken from Form 5227, Part II, line 23. NOTE: Detail may not add to totals due to rounding.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 6. Charitable Remainder Unitrusts: Book Value Balance Sheet Information, by Size of End-ofYear Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net assets [2] Total liabilities and net assets [3] Total assets [4] Cash Savings and temporary cash investments Receivables due [5] Inventories and prepaid expenses Total investments Securities Government obligations Corporate stock Corporate bonds Land, buildings, and equipment Other investments Charitable purpose land, buildings, and equipment Other assets Total liabilities [6] Accounts payable, accrued expenses, and deferred revenue Other liabilities [7] 94,767 79,930,081 81,121,949 81,121,949 1,026,000 4,957,637 1,126,560 7,816 71,700,498 50,186,209 4,840,546 37,616,254 7,729,408 749,432 20,764,857 218,919 2,084,498 1,191,868 308,948 882,920 Under $500,000 [1] (2) 66,187 11,896,977 12,048,950 12,048,950 193,592 684,447 ** 202,062 ** 10,370,099 8,680,421 535,161 6,646,864 1,498,396 74,364 1,615,315 46,344 552,392 151,973 41,335 110,638 $500,000 under $1,000,000 (3) 15,116 10,429,235 10,558,223 10,558,223 136,632 648,581 ** 123,542 ** 9,308,386 7,965,310 592,076 6,079,744 1,293,490 99,921 1,243,155 * 13,492 327,586 128,988 35,891 93,097 $1,000,000 under $3,000,000 (4) 9,974 15,911,085 16,158,249 16,158,249 237,463 931,462 329,918 5,429 14,127,705 11,746,472 1,128,405 8,868,506 1,749,560 173,207 2,208,026 63,770 462,500 247,164 66,909 180,256 $3,000,000 under $10,000,000 (5) 2,743 13,388,876 13,617,030 13,617,030 198,165 747,789 251,342 1,325 12,006,408 9,408,198 1,086,674 6,993,808 1,327,716 199,085 2,399,124 57,959 354,042 228,154 41,578 186,576 $10,000,000 or more (6) 746 28,303,908 28,739,497 28,739,497 260,149 1,945,359 220,594 162 25,887,901 12,385,808 1,498,231 9,027,332 1,860,245 202,855 13,299,238 * 37,354 387,978 435,589 123,236 312,352
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part IV, line 46, column (b). This is the excess of total assets over total liabilities. This value may deviate from the calculated value of total assets (line 37, column (b)) less total liabilities (line 43, column (b)) due to taxpayer reporting discrepancies. [3] Taken from "total liabilities and net assets" (Form 5227, Part IV, line 47, column (b)) . This amount may not equal "total liabilities" (line 43, column (b)) plus "total net assets" (line 46, column (b)) due to taxpayer reporting discrepancies. [4] Taken from Form 5227, Part IV, line 37, column (b). [5] Calculated as the sum of "accounts receivable" (Form 5227, Part IV, line 27, column (b)), "receivables due from officers, directors, and other disqualified persons" (line 28, column b), and "other notes and loans receivable" (line 29, column (b)). [6] Taken from Form 5227, Part IV, line 43, column (b). [7] Includes "loans from officers, directors, trustees, and other disqualified persons" (Form 5227, Part IV, line 40, column (b)), "mortgages and other notes payable" (line 41, column b), and "other liabilities" (line 42, column (b)). NOTE: Detail may not add to totals due to rounding.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 7. Charitable Remainder Unitrusts: Fair Market Value Balance Sheet Information, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total assets Cash Savings and temporary cash investments Receivables due [2] Inventories and prepaid expenses Total investments Securities Government obligations Corporate stock Corporate bonds Land, buildings, and equipment Other investments Charitable purpose land, buildings, and equipment Other assets 94,767 96,835,553 1,099,830 4,996,553 1,068,410 8,653 86,920,413 59,605,369 5,211,882 46,466,085 7,927,403 1,081,192 26,233,853 343,564 2,398,098 Under $500,000 $500,000 under [1] $1,000,000 (2) 66,187 14,162,526 208,360 702,892 ** 190,017 ** 12,314,060 10,226,133 576,414 8,097,842 1,551,877 263,491 1,824,436 120,097 627,078 (3) 15,116 11,993,819 140,045 669,206 ** 120,806 ** 10,688,907 9,231,285 649,754 7,247,561 1,333,969 135,540 1,322,082 * 40,298 334,550 $1,000,000 under $3,000,000 (4) 9,974 18,362,797 249,926 947,998 319,985 6,270 16,213,653 13,493,948 1,228,720 10,475,233 1,789,994 244,478 2,475,227 73,110 551,852 $3,000,000 under $10,000,000 (5) 2,743 15,405,494 200,431 735,553 225,370 1,325 13,767,797 10,897,889 1,150,206 8,363,458 1,384,225 219,830 2,650,078 * 70,787 404,231 $10,000,000 or more (6) 746 36,910,917 301,068 1,940,905 213,131 158 33,935,996 15,756,114 1,606,788 12,281,990 1,867,336 217,852 17,962,029 * 39,272 480,388
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report the end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Calculated as the sum of "accounts receivable" (Form 5227, Part IV, line 27), "receivables due from officers, directors, and other disqualified persons" (line 28), and "other notes and loans receivable" (line 29). NOTE: Detail may not add to totals due to rounding.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 8. Charitable Lead Trusts: Book Value Balance Sheet Information, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net assets [2] Total liabilities and net assets [3] Total assets [4] Cash Savings and temporary cash investments Receivables due, inventories, and prepaid expenses [5] Total investments Securities Government obligations Corporate stock Corporate bonds Other investments [6] Other assets [7] Total liabilities [8] 6,298 15,989,128 16,485,658 16,485,658 210,717 1,064,356 148,358 14,509,019 8,119,631 650,227 6,756,726 712,678 6,389,388 553,207 496,529 Under $500,000 [1] (2) 2,724 518,745 541,074 541,074 20,673 ** 41,714 ** 463,618 367,771 53,894 288,666 25,211 95,847 15,069 22,329 $500,000 under $1,000,000 (3) 1,362 957,121 975,209 975,209 32,736 ** 88,117 ** 854,283 546,665 45,897 454,873 * 45,896 307,618 * 73 * 18,088 $1,000,000 under $3,000,000 (4) 1,379 2,299,523 2,369,714 2,369,714 31,015 121,044 29,869 2,142,517 1,632,796 134,943 1,339,110 158,743 509,721 45,268 70,191 $3,000,000 under $10,000,000 (5) 601 3,133,114 3,200,844 3,200,844 41,413 188,267 26,959 2,828,171 1,533,191 92,245 1,247,872 193,074 1,294,980 * 116,034 67,730 $10,000,000 or more (6) 232 9,080,625 9,398,817 9,398,817 84,879 626,357 90,388 8,220,430 4,039,207 323,248 3,426,205 289,755 4,181,222 376,763 318,192
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report the end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by trusts filing a final return. [2] Taken from Form 5227, Part IV, line 46, column (b). This is the excess of total assets over total liabilities. This value may deviate from the calculated value of total assets (line 37, column (b)) less total liabilities (line 43, column (b)) due to taxpayer reporting discrepancies. [3] Taken from "total liabilities and net assets" (Form 5227, Part IV, line 47, column (b)). This amount may not equal "total liabilities" (line 43, column (b)) plus "total net assets" (line 46, [4] Taken from Form 5227, Part IV, line 37, column (b). [5] Calculated as the sum of "accounts receivable" (Form 5227, Part IV, line 27, column (b)), "receivables due from officers, directors, and other disqualified persons" (line 28, column (b)), "other notes and loans receivable" (line 29, column (b)), "inventories for sale or use" (line 30, column (b)), and "prepaid expenses and deferred charges" (line 31, column (b)). [6] Calculated as the sum of "investments—land, buildings, and equipment" (Form 5227, Part IV, line 33, column (b)) and "investments—other" (line 34, column (b)). [7] Calculated as the sum of "charitable purpose land, buildings, and equipment" (Form 5227, Part IV, line 35, column (b)) and "other assets" (line 36, column (b)). [8] Taken from Form 5227, Part IV, line 43, column (b). NOTE: Detail may not add to totals due to rounding and taxpayer reporting discrepancies.
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Split-Interest Trusts, Filing Year 2006
Statistics of Income Bulletin | Winter 2008
Table 9. Pooled Income Funds: Book Value Balance Sheet Information, by Size of End-of-Year Book Value of Total Assets, Filing Year 2006
[All figures are estimates based on samples—money amounts are in thousands of dollars]
Size of end-of-year book value of total assets Item Total (1) Number of returns Total net assets [2] Total liabilities and net assets [3] Total assets [4] Cash Savings and temporary cash investments Receivables due, inventories, and prepaid expenses [5] Total investments Securities Government obligations Corporate stock Corporate bonds Other investments [6] Other assets [7] Total liabilities [8] 1,676 1,483,773 1,599,610 1,599,610 10,778 79,213 4,079 1,437,245 1,163,438 231,772 460,045 471,621 273,807 68,294 115,837 Under $1,000,000 [1] (2) 1,427 198,000 198,393 198,393 1,558 ** 13,015 ** 141,833 107,620 13,030 38,542 56,048 34,214 41,987 * 393 $1,000,000 under $3,000,000 under $3,000,000 $10,000,000 (3) 138 221,101 221,956 221,956 1,670 ** 13,489 ** 204,121 193,884 29,588 56,750 107,546 * 10,237 * 2,677 * 855 (4) 84 432,438 435,126 435,126 3,335 15,502 * 127 415,923 375,385 56,389 151,118 167,878 40,538 * 239 2,689 $10,000,000 or more (5) 26 632,234 744,134 744,134 4,216 39,817 * 1,341 675,368 486,550 132,765 213,635 140,150 * 188,818 * 23,391 111,900
* Estimate should be used with caution because of the small number of sample returns on which it is based. ** Data are combined to prevent disclosure of individual taxpayer data. However, the data are included in the appropriate totals. [1] Includes returns that did not report the end-of-year book value of total assets (Form 5227, Part IV, line 37, column (b)) from the balance sheet, or that reported the amount as zero. Often, these zero amounts are explained by funds filing a final return. [2] Taken from Form 5227, Part IV, line 46, column (b). This is the excess of total assets over total liabilities. This value may deviate from the calculated value of total assets (line 37, column (b)) less total liabilities (line 43, column (b)) due to taxpayer reporting discrepancies. [3] Taken from "total liabilities and net assets" (Form 5227, Part IV, line 47, column (b)). This amount may not equal "total liabilities" (line 43, column (b)) plus "total net assets" (line [4] Taken from Form 5227, Part IV, line 37, column (b). [5] Calculated as the sum of "accounts receivable" (Form 5227, Part IV, line 27, column (b)), "receivables due from officers, directors, and other disqualified persons" (line 28, column (b)), "other notes and loans receivable" (line 29, column (b)), "inventories for sale or use" (line 30, column (b)), and "prepaid expenses and deferred charges" (line 31, [6] Calculated as the sum of "investments—land, buildings, and equipment" (Form 5227, Part IV, line 33, column (b)) and "investments—other" (line 34, column (b)). [7] Calculated as the sum of "charitable purpose land, buildings, and equipment" (Form 5227, Part IV, line 35, column (b)) and "other assets" (line 36, column (b)). [8] Taken from Form 5227, Part IV, line 43, column (b). NOTE: Detail may not add to totals due to rounding.
75