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The legal reasoning behind the answer to the question is based on the information provided in the retrieved documents, specifically from Publication 559 (2021). According to this publication, Form 5227 is filed only by split-interest trusts and it is not filed by charitable remainder trusts or charitable lead trusts. The publication further states that if you are filing Form 5227, you may also have to file Form 1041, U.S. Income Tax Return for Estates and Trusts, for the trust. However, it is important to note that the requirement to file Form 1041 is not automatic and depends on the specific circumstances of the trust.
Form 5227, Split-Interest Trust Information Return, is used by split-interest trusts to report any taxable event during the tax year. A taxable event includes the creation of a split-interest trust, the termination of a charitable remainder annuity trust (CRAT) or a charitable remainder unitrust (CRUT), or the death of an individual whose estate includes a split-interest trust. Form 5227 is also used to report the tax on net investment income of certain charitable remainder trusts (CRTs) and pooled income funds (PIFs).
On the other hand, Form 1041, U.S. Income Tax Return for Estates and Trusts, is used by a trust or decedent's estate if it has $600 or more of gross income or if it has a beneficiary who is a nonresident alien. The fiduciary of a domestic trust must file Form 1041 if any of the following apply. Form 1041 is used to report the income, deductions, gains, losses, and credits of a domestic decedent's estate or trust. The decedent's estate or trust is a separate legal entity for federal tax purposes. Estates and trusts are allowed many of the same deductions as individuals, such as deductions for wages, rent, and other ordinary and necessary business expenses.
In conclusion, a Form 5227 may also require a Form 1041, but it is not a universal requirement and depends on the specific circumstances of the trust.
Sources:
Publication 519 (2022)
§ 4947. Application of taxes to certain nonexempt trusts
Publication 557 (1/2023)
Rev. Rul. 81-100
Publication 1525
Publication 559 (2021)
