Internal Revenue Bulletin 2005-34 (PDF rendition): IRS Revenue Procedures

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

Bulletin No. 200
5-34
August 22, 2005
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Proc. 2005–52, page 326.
Sample inter vivos charitable remainder unitrust (CRUT)
for one measuring life.This procedure contains a sample
declaration of trust that meets the requirements under section
664 of the Code and 1.664–3 of the regulations for an inter
vivos charitable remainder unitrust for one measuring life. This
procedure also contains annotations to the sample trust and
alternate provisions that may be integrated into the sample
trust. Rev. Proc. 89–20 and section 4 of Rev. Proc. 90–31
superseded.
Rev. Proc
. 2005–53, page 339.
Sample in
ter vivos charitable remainder unitrust (CRUT)
for a term
of years.This procedure contains a sample decla-
ration of
trust that meets the requirements under section 664
of the Co
de and 1.664–3 of the regulations for an inter vivos
charita
ble remainder unitrust with a term of years unitrust pe-
riod. Th
is procedure also contains annotations to the sample
trust an
d alternate provisions that may be integrated into the
sample
trust.
Rev. Proc. 2005–54, page 353.
Sample inter vivos charitable remainder unitrust (CRUT)
with consecutive interests for two measuring lives.This
procedure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and 1.664–3
of the regulations for an inter vivos charitable remainder uni-
trust with consecutive interests for two measuring lives. This
procedure also contains annotations to the sample trust and al-
ternate provisions that may be integrated into the sample trust.
Section 4 of Rev. Proc. 90–30 and section 5 of Rev. Proc.
90–31 superseded.
Rev. Proc. 2005–55, page 367.
Sample inter vivos charitable remainder unitrust (CRUT)
with concurrent and consecutive interests for two mea-
suring lives.This procedure contains a sample declaration
of trust that meets the requirements under section 664 of the
Code and 1.664–3 of the regulations for an inter vivos char-
itable remainder unitrust with concurrent and consecutive in-
terests for two measuring lives. This procedure also contains
annotations to the sample trust and alternate provisions that
may be integrated into the sample trust. Section 5 of Rev.
Proc. 90–30 and section 6 of Rev. Proc. 90–31 superseded.
Rev. Proc. 2005–56, page 383.
Sample testamentary charitable remainder unitrust
(CRUT) for one measuring life.This procedure contains a
sample declaration of trust that meets the requirements under
section 664 of the Code and 1.664–3 of the regulations for a
testamentary charitable remainder unitrust for one measuring
life. This procedure also contains annotations to the sample
trust and alternate provisions that may be integrated into the
sample trust. Section 6 of Rev. Proc. 90–30 and section 7 of
Rev. Proc. 90–31 superseded.
Rev. Proc. 2005–57, page 392.
Sample testamentary charitable remainder unitrust
(CRUT) for a term of years.This procedure contains a
sample declaration of trust that meets the requirements under
section 664 of the Code and 1.664–3 of the regulations for
a testamentary charitable remainder unitrust with a term of
years unitrust period. This procedure also contains annota-
tions to the sample trust and alternate provisions that may be
integrated into the sample trust.
(Continued on the next page)
Fi
nding Lists begin on page ii.

Rev. Proc. 2005–58, page 402.
Sample testamentary charitable remainder unitrust
(CRUT) with consecutive interests for two measuring
lives.This procedure contains a sample declaration of trust
that meets the requirements under section 664 of the Code
and 1.664–3 of the regulations for a testamentary charitable
remainder unitrust with consecutive interests for two mea-
suring lives. This procedure also contains annotations to the
sample trust and alternate provisions that may be integrated
into the sample trust. Section 7 of Rev. Proc. 90–30 and
section 8 of Rev. Proc. 90–31 superseded.
Rev. Proc. 2005–59, page 412.
Sample testamentary charitable remainder unitrust
(CRUT) with concurrent and consecutive interests for
two measuring lives.This procedure contains a sample
declaration of trust that meets the requirements under section
664 of the Code and 1.664–3 of the regulations for a tes-
tamentary charitable remainder unitrust with concurrent and
consecutive interests for two measuring lives. This procedure
also contains annotations to the sample trust and alternate
provisions that may be integrated into the sample trust.
Section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc.
90–31 superseded.
ESTATE TAX
Rev. Proc. 2005–52, page 326.
Sample inter vivos charitable remainder unitrust (CRUT)
for one measuring life.This procedure contains a sample
declaration of trust that meets the requirements under section
664 of the Code and 1.664–3 of the regulations for an inter
vivos charitable remainder unitrust for one measuring life. This
procedure also contains annotations to the sample trust and
alternate provisions that may be integrated into the sample
trust. Rev. Proc. 89–20 and section 4 of Rev. Proc. 90–31
superseded.
Rev. Proc. 2005–53, page 339.
Sample inter vivos charitable remainder unitrust (CRUT)
for a term of years.This procedure contains a sample decla-
ration of trust that meets the requirements under section 664
of the Code and 1.664–3 of the regulations for an inter vivos
charitable remainder unitrust with a term of years unitrust pe-
riod. This procedure also contains annotations to the sample
trust and alternate provisions that may be integrated into the
sample trust.
Rev. Proc. 2005–54, page 353.
Sample inter vivos charitable remainder unitrust (CRUT)
with consecutive interests for two measuring lives.This
procedure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and 1.664–3
of the regulations for an inter vivos charitable remainder uni-
trust with consecutive interests for two measuring lives. This
procedure also contains annotations to the sample trust and al-
ternate provisions that may be integrated into the sample trust.
Section 4 of Rev. Proc. 90–30 and section 5 of Rev. Proc.
90–31 superseded.
Rev. Proc. 2005–55, page 367.
Sample inter vivos charitable remainder unitrust (CRUT)
with concurrent and consecutive interests for two mea-
suring lives.This procedure contains a sample declaration
of trust that meets the requirements under section 664 of the
Code and 1.664–3 of the regulations for an inter vivos char-
itable remainder unitrust with concurrent and consecutive in-
terests for two measuring lives. This procedure also contains
annotations to the sample trust and alternate provisions that
may be integrated into the sample trust. Section 5 of Rev.
Proc. 90–30 and section 6 of Rev. Proc. 90–31 superseded.
Rev. Proc. 2005–56, page 383.
Sample testamentary charitable remainder unitrust
(CRUT) for one measuring life.This procedure contains a
sample declaration of trust that meets the requirements under
section 664 of the Code and 1.664–3 of the regulations for a
testamentary charitable remainder unitrust for one measuring
life. This procedure also contains annotations to the sample
trust and alternate provisions that may be integrated into the
sample trust. Section 6 of Rev. Proc. 90–30 and section 7 of
Rev. Proc. 90–31 superseded.
Rev. Proc. 2005–57, page 392.
Sample testamentary charitable remainder unitrust
(CRUT) for a term of years.This procedure contains a
sample declaration of trust that meets the requirements under
section 664 of the Code and 1.664–3 of the regulations for
a testamentary charitable remainder unitrust with a term of
years unitrust period. This procedure also contains annota-
tions to the sample trust and alternate provisions that may be
integrated into the sample trust.
Rev. Proc. 2005–58, page 402.
Sample testamentary charitable remainder unitrust
(CRUT) with consecutive interests for two measuring
lives.This procedure contains a sample declaration of trust
that meets the requirements under section 664 of the Code
and 1.664–3 of the regulations for a testamentary charitable
remainder unitrust with consecutive interests for two mea-
suring lives. This procedure also contains annotations to the
sample trust and alternate provisions that may be integrated
into the sample trust. Section 7 of Rev. Proc. 90–30 and
section 8 of Rev. Proc. 90–31 superseded.
(Continued on the next page)
August 22, 20052005–34 I.R.B.

Rev. Proc. 2005–59, page 412.
Sample testamentary charitable remainder unitrust
(CRUT) with concurrent and consecutive interests for
two measuring lives.This procedure contains a sample
declaration of trust that meets the requirements under section
664 of the Code and 1.664–3 of the regulations for a tes-
tamentary charitable remainder unitrust with concurrent and
consecutive interests for two measuring lives. This procedure
also contains annotations to the sample trust and alternate
provisions that may be integrated into the sample trust.
Section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc.
90–31 superseded.
GIFT TAX
Rev. Proc. 2005–52, page 326.
Sample inter vivos charitable remainder unitrust (CRUT)
for one measuring life.This procedure contains a sample
declaration of trust that meets the requirements under section
664 of the Code and 1.664–3 of the regulations for an inter
vivos charitable remainder unitrust for one measuring life. This
procedure also contains annotations to the sample trust and
alternate provisions that may be integrated into the sample
trust. Rev. Proc. 89–20 and section 4 of Rev. Proc. 90–31
superseded.
Rev. Proc. 2005–53, page 339.
Sample inter vivos charitable remainder unitrust (CRUT)
for a term of years.This procedure contains a sample decla-
ration of trust that meets the requirements under section 664
of the Code and 1.664–3 of the regulations for an inter vivos
charitable remainder unitrust with a term of years unitrust pe-
riod. This procedure also contains annotations to the sample
trust and alternate provisions that may be integrated into the
sample trust.
Rev. Proc. 2005–54, page 353.
Sample inter vivos charitable remainder unitrust (CRUT)
with consecutive interests for two measuring lives.This
procedure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and 1.664–3
of the regulations for an inter vivos charitable remainder uni-
trust with consecutive interests for two measuring lives. This
procedure also contains annotations to the sample trust and al-
ternate provisions that may be integrated into the sample trust.
Section 4 of Rev. Proc. 90–30 and section 5 of Rev. Proc.
90–31 superseded.
Rev. Proc. 2005–55, page 367.
Sample inter vivos charitable remainder unitrust (CRUT)
with concurrent and consecutive interests for two mea-
suring lives.This procedure contains a sample declaration
of trust that meets the requirements under section 664 of the
Code and 1.664–3 of the regulations for an inter vivos char-
itable remainder unitrust with concurrent and consecutive in-
terests for two measuring lives. This procedure also contains
annotations to the sample trust and alternate provisions that
may be integrated into the sample trust. Section 5 of Rev.
Proc. 90–30 and section 6 of Rev. Proc. 90–31 superseded.
2005–34 I.R.B.August 22, 2005

The IRS Mission
Provide America’s taxpayers top quality service by helping
them understand and meet their tax responsibilities and by
applying the tax law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
August 22, 20052005–34 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 170.—Charitable,
etc., Contributions and Gifts
26 CFR 1.170A–6: Charitable contributions in trust.
Sample inter vivos CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for an inter vivos charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-52, page 326.
Sample inter vivos CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for an inter vivos charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-53, page 339.
Sample inter vivos CRUT with consecutive in-
terests for two measuring lives.This revenue proce-
dure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and
1.664–3 of the Income Tax Regulations for an inter
vivos charitable remainder unitrust with consecutive
interests for two measuring lives. This revenue pro-
cedure also contains annotations to the sample trust
and alternate provisions that may be integrated into
the sample trust. See Rev. Proc. 2005-54, page 353.
Sample inter vivos CRUT with concurrent and
consecutive interests for two measuring lives.This
revenue procedure contains a sample declaration of
trust that meets the requirements under section 664 of
the Code and 1.664–3 of the Income Tax Regulations
for an inter vivos charitable remainder unitrust with
concurrent and consecutive interests for two measur-
ing lives. This revenue procedure also contains an-
notations to the sample trust and alternate provisions
that may be integrated into the sample trust. See Rev.
Proc. 2005-55, page 367.
Sample testamentary CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for a testamentary charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-56, page 383.
Sample testamentary CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for a testamentary charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-57, page 392.
Sample testamentary CRUT with consecutive
interests for two measuring lives.This revenue
procedure contains a sample declaration of trust that
meets the requirements under section 664 of the Code
and 1.664–3 of the Income Tax Regulations for a tes-
tamentary charitable remainder unitrust with consec-
utive interests for two measuring lives. This rev-
enue procedure also contains annotations to the sam-
ple trust and alternate provisions that may be inte-
grated into the sample trust. See Rev. Proc. 2005-58,
page 402.
Sample testamentary CRUT with concurrent
and consecutive interests for two measuring lives.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section
664 of the Code and 1.664–3 of the Income Tax
Regulations for a testamentary charitable remainder
unitrust with concurrent and consecutive interests for
two measuring lives. This revenue procedure also
contains annotations to the sample trust and alternate
provisions that may be integrated into the sample
trust. See Rev. Proc. 2005-59, page 412.
Section 664.—Charitable
Remainder Trusts
26 CFR 1.664–1: Charitable remainder trusts.
26 CFR 1.664–3: Charitable remainder unitrust.
26 CFR 1.664–4: Calculation of the fair market value
of the remainder interest in a charitable remainder
unitrust.
Sample inter vivos CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for an inter vivos charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-52, page 326.
Sample inter vivos CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for an inter vivos charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-53, page 339.
Sample inter vivos CRUT with consecutive in-
terests for two measuring lives.This revenue proce-
dure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and
1.664–3 of the Income Tax Regulations for an inter
vivos charitable remainder unitrust with consecutive
interests for two measuring lives. This revenue pro-
cedure also contains annotations to the sample trust
and alternate provisions that may be integrated into
the sample trust. See Rev. Proc. 2005-54, page 353.
Sample inter vivos CRUT with concurrent and
consecutive interests for two measuring lives.This
revenue procedure contains a sample declaration of
trust that meets the requirements under section 664 of
the Code and 1.664–3 of the Income Tax Regulations
for an inter vivos charitable remainder unitrust with
concurrent and consecutive interests for two measur-
ing lives. This revenue procedure also contains an-
notations to the sample trust and alternate provisions
that may be integrated into the sample trust. See Rev.
Proc. 2005-55, page 367.
Sample testamentary CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for a testamentary charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-56, page 383.
Sample testamentary CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for a testamentary charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-57, page 392.
Sample testamentary CRUT with consecutive
interests for two measuring lives.This revenue
procedure contains a sample declaration of trust that
meets the requirements under section 664 of the Code
and 1.664–3 of the Income Tax Regulations for a tes-
tamentary charitable remainder unitrust with consec-
utive interests for two measuring lives. This rev-
enue procedure also contains annotations to the sam-
ple trust and alternate provisions that may be inte-
2005–34 I.R.B.324August 22, 2005

grated into the sample trust. See Rev. Proc. 2005-58,
page 402.
Sample testamentary CRUT with concurrent
and consecutive interests for two measuring lives.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section
664 of the Code and 1.664–3 of the Income Tax
Regulations for a testamentary charitable remainder
unitrust with concurrent and consecutive interests for
two measuring lives. This revenue procedure also
contains annotations to the sample trust and alternate
provisions that may be integrated into the sample
trust. See Rev. Proc. 2005-59, page 412.
Section 2055.—Transfers
for Public, Charitable, and
Religious Uses
26 CFR 20.2055–2: Transfers not exclusively for
charitable purposes.
Sample inter vivos CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for an inter vivos charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-52, page 326.
Sample inter vivos CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for an inter vivos charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-53, page 339.
Sample inter vivos CRUT with consecutive in-
terests for two measuring lives.This revenue proce-
dure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and
1.664–3 of the Income Tax Regulations for an inter
vivos charitable remainder unitrust with consecutive
interests for two measuring lives. This revenue pro-
cedure also contains annotations to the sample trust
and alternate provisions that may be integrated into
the sample trust. See Rev. Proc. 2005-54, page 353.
Sample inter vivos CRUT with concurrent and
consecutive interests for two measuring lives.This
revenue procedure contains a sample declaration of
trust that meets the requirements under section 664 of
the Code and 1.664–3 of the Income Tax Regulations
for an inter vivos charitable remainder unitrust with
concurrent and consecutive interests for two measur-
ing lives. This revenue procedure also contains an-
notations to the sample trust and alternate provisions
that may be integrated into the sample trust. See Rev.
Proc. 2005-55, page 367.
Sample testamentary CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for a testamentary charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-56, page 383.
Sample testamentary CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for a testamentary charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-57, page 392.
Sample testamentary CRUT with consecutive
interests for two measuring lives.This revenue
procedure contains a sample declaration of trust that
meets the requirements under section 664 of the Code
and 1.664–3 of the Income Tax Regulations for a tes-
tamentary charitable remainder unitrust with consec-
utive interests for two measuring lives. This rev-
enue procedure also contains annotations to the sam-
ple trust and alternate provisions that may be inte-
grated into the sample trust. See Rev. Proc. 2005-58,
page 402.
Sample testamentary CRUT with concurrent
and consecutive interests for two measuring lives.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section
664 of the Code and 1.664–3 of the Income Tax
Regulations for a testamentary charitable remainder
unitrust with concurrent and consecutive interests for
two measuring lives. This revenue procedure also
contains annotations to the sample trust and alternate
provisions that may be integrated into the sample
trust. See Rev. Proc. 2005-59, page 412.
Section 2522.—Charitable
and Similar Gifts
26 CFR 20.2522(c)–3: Transfers not exclusively for
charitable, etc., purposes in the case of gifts made
after July 31, 1969.
Sample inter vivos CRUT for one measuring
life.This revenue procedure contains a sample decla-
ration of trust that meets the requirements under sec-
tion 664 of the Code and 1.664–3 of the Income Tax
Regulations for an inter vivos charitable remainder
unitrust for one measuring life. This revenue proce-
dure also contains annotations to the sample trust and
alternate provisions that may be integrated into the
sample trust. See Rev. Proc. 2005-52, page 326.
Sample inter vivos CRUT for a term of years.
This revenue procedure contains a sample declaration
of trust that meets the requirements under section 664
of the Code and 1.664–3 of the Income Tax Regula-
tions for an inter vivos charitable remainder unitrust
for a term of years. This revenue procedure also con-
tains annotations to the sample trust and alternate pro-
visions that may be integrated into the sample trust.
See Rev. Proc. 2005-53, page 339.
Sample inter vivos CRUT with consecutive in-
terests for two measuring livesThis revenue proce-
dure contains a sample declaration of trust that meets
the requirements under section 664 of the Code and
1.664–3 of the Income Tax Regulations for an inter
vivos charitable remainder unitrust with consecutive
interests for two measuring lives. This revenue pro-
cedure also contains annotations to the sample trust
and alternate provisions that may be integrated into
the sample trust. See Rev. Proc. 2005-54, page 353.
Sample inter vivos CRUT with concurrent and
consecutive interests for two measuring lives.This
revenue procedure contains a sample declaration of
trust that meets the requirements under section 664 of
the Code and 1.664–3 of the Income Tax Regulations
for an inter vivos charitable remainder unitrust with
concurrent and consecutive interests for two measur-
ing lives. This revenue procedure also contains an-
notations to the sample trust and alternate provisions
that may be integrated into the sample trust. See Rev.
Proc. 2005-55, page 367.
August 22, 20053252005–34 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055, 2522; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2, 25.2522(c)–3.)
Rev. Proc. 2005–52
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for an inter vivos charitable remainder unitrust (CRUT) providing for unitrust
payments for one measuring life followed by the distribution of trust assets to a charitable remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Service issued sample trust instruments for certain types of CRUTs. The Service is updating the
previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions are
included as further guidance. In addition to the sample trust instrument included in this revenue procedure for an inter vivos CRUT
providing for unitrust payments for one measuring life, samples are provided in other separate revenue procedures for:
(a)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(b)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31, 1990–1
C.B. 539);
(c)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30 and section 6 of Rev. Proc. 90–31);
(d)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57);
(f)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc. 90–30 and section 8 of Rev. Proc. 90–31); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for an inter vivos CRUT with one measuring life that is
created by an individual who is a citizen or resident of the United States. Section 5 of this revenue procedure provides annotations to
the provisions of the sample trust. Section 6 of this revenue procedure provides samples of certain alternate provisions concerning:
(.01) the payment of part of the unitrust amount to an organization described in § 170(c); (.02) a qualified contingency; (.03) the
last unitrust payment to the recipient; (.04) the restriction of the charitable remainderman to a public charity; (.05) a retained right to
substitute the charitable remainderman; (.06) a power of appointment to designate the charitable remainderman; (.07) the net income
method of calculating the unitrust amount; (.08) the net income with make-up method of calculating the unitrust amount; and (.09) a
combination of methods for calculating the unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be de-
ductible by a citizen or resident of the United States under §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) for income, estate, and
gift tax purposes, respectively, if the otherrequirements of §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) (that is, the require-
ments not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust as a qualified CRUT
meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner consistent with the terms
of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is substantially similar to
the sample in section 4 of this revenue procedure; or (ii) properly integrates one ormore alternate provisions from section 6 of this
revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure. A trust that contains
substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly integrated alternate
provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under applicable local law that are
not inconsistent with the applicable federal tax requirements), or that omits any of the provisions of section 4 of this revenue procedure
(unless an alternate provision from section 6 of this revenue procedure is properly integrated), will not necessarily be disqualified,
but neither will that trust be assured of qualification under the provisions of this revenue procedure. The Service generally will not
issue a letter ruling on whether an inter vivos trust created by an individual providing for unitrust payments for one measuring life
2005–34 I.R.B.326August 22, 2005

qualifies as a CRUT. The Service, however, generally will issue letter rulings on the effect ofsubstantive trust provisions, other than
those contained in sections 4 and 6 of this revenue procedure, on the qualification of a trust as a CRUT.
SECTION 4. SAMPLE INTER VIVOS CHARITABLE REMAINDER UNITRUST — ONE LIFE
On thisday of,20,I,(hereinafter “the Donor”), desiring to establish a
charitable remainder unitrust within the meaning of Rev. Proc.2005–52 and § 664(d)(2) of the Internal Revenue Code (hereinafter
“the Code”), hereby enter into this trust agreement with
as the initial trustee (hereinafter “the Trustee”). This trust
shall be known as the
Charitable Remainder Unitrust.
1.Funding of Trust. The Donor hereby transfers and irrevocably assigns,on the above date, to the Trustee the property described
in Schedule A, and the Trustee accepts the property and agreesto hold, manage, and distribute theproperty, and any property subse-
quently transferred, under the termsset forth in this trust instrument.
2.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient] (hereinafter “the Recipient”) a unitrust amount equal to [a number no less than 5 and no more than 50] percent of the net
fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter “the valuation date”).
The first day of the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust period shall
be the date of the Recipient’s death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar
quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of
the unitrust amount shall be added to principal. If, for any year, thenet fair market value of the trust assets is incorrectly determined,
then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in the case of an
undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust
amount(s) properly payable and the unitrust amount(s) actually paid.
3.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2, or, if an additional contribution is made to the trust, the
unitrust amount described in paragraph 5.
4.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Recipient under the terms of this trust) to [designated remainderman] (hereinafter “the
Charitable Organization”). If the Charitable Organization is not an organization described in §§ 170(c), 2055(a), and 2522(a) of the
Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the then principal
and income to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in
the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
5.Additional Contributions. If any additional contributions are made to the trust after the initial contribution, the unitrust amount
for the year in which any additional contribution is made shall be [same percentage used in paragraph 2] percent of the sum of (a)
the net fair market value of the trust assets as of the valuation date(excluding the assets so added and any post-contribution income
from, and appreciation on, such assets duringthat year) and (b) for each additional contribution during the year, the fair market value
of the assets so added as of the valuation date (including any post-contribution income from, and appreciation on, such assets through
the valuation date) multiplied by a fraction the numerator of which is the number of days in the period that begins with the date of
contribution and ends with the earlier of the last day of the taxable year or the last day of the unitrust period and the denominator of
which is the number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last day
in such taxable year or the last day of the unitrust period. In a taxable year in which an additional contribution is made on or after the
valuation date, the assets so added shall be valued as of the date ofcontribution, without regard to any post-contribution income or
appreciation, rather thanas of the valuation date.
6.Deferral of the Unitrust Payment Allocable to Testamentary Transfer. All property passing to the trust by reason of the death
of the Donor (hereinafter “the testamentarytransfer”) shall be considered to be a single contribution that is made on the date of the
Donor’s death. Notwithstanding the provisions of paragraphs 2and 5 above, the obligation to pay the unitrust amount with respect
to the testamentary transfer shall commence with the date of the Donor’s death. Nevertheless, payment of the unitrust amount with
respect to the testamentary transfer may be deferred from the date of the Donor’s death until the end of the taxable year in which the
funding of the testamentary transfer is completed. Within a reasonable time after the end of the taxable year in which the testamentary
transfer is completed, the Trustee must pay to the Recipient (inthe case of an underpayment) or receive from the Recipient (in the
case of an overpayment) the difference betweenany unitrust amounts allocable to the testamentary transfer that were actually paid,
plus interest, and the unitrust amounts allocable to the testamentary transfer that were payable, plus interest. The interest shall be
computed for any period at the rate of interest, compounded annually, that the federal income tax regulations under § 664 of the Code
prescribe for this computation.
7.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
August 22, 20053272005–34 I.R.B.

8.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
9.Taxable Year. The taxable year of the trustshall be the calendar year.
10.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the
Trustee is prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification
of the trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
11.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
12.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
13.Definition of Recipient. References to the Recipient in this trust instrumentshall be deemed to include the estate of the Recipient
with regard to all provisions in this trust instrument that describe amounts payable to and/or due from the Recipient. The prior sentence
shall not apply to the determination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — ONE LIFE
.01Annotations for Introductory Paragraph and Paragraph 1, Funding of Trust, of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 170, § 2055, or § 2522 for property
contributed to the trust. Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition
of, and function exclusively as, a charitable remainder trust from the creation of the trust. Section 1.664–1(a)(4). Solely
for purposes of § 664, a trust is deemed created at the earliest time that neither the grantor nor any other person is treated
as the owner of the entire trust under subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code (subpart E), but in
no event prior to the time property is first transferred to thetrust. Neither the donor nor the donor’s spouse shall be treated
as the owner of the trust under subpart E merely because he or she is named as a recipient of the unitrust amount. Section
1.664–1(a)(4). In addition, funding the trust with certain types of assets may disqualify a charitable remainder trust. See
§ 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.07 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Income tax deductibility limitations. The amount of the charitable deduction for income tax purposes is affected by a number
of factors, including the type of property contributed to the trust, the type of charity receiving the property, whether the
remainder interest is paid outright to charity or held in further trust, and the donor’s adjusted gross income (with certain
adjustments). See § 170(b) and (e); § 1.170A–8; Rev. Rul. 80–38, 1980–1 C.B. 56; and Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.04 of this revenue procedure for an alternate provision that restricts the charitable remainderman to a
public charity (as defined therein).
(4)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating tothe trustee’s duties and powers, as long as the provisions do
not conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder.
(5)Identity of donor. For purposes of qualification under this revenue procedure, the donor may be an individual or a husband
and wife. Appropriate adjustments should be made to the introductory paragraph if a husband and wife are the donors.
Terms such as “grantor” or “settlor” may be substituted for “donor.”
.02Annotations for Paragraph 2, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible recipients. For a CRUT with a unitrust period based on the life of one individual, the unitrust amount must
generally be paid to that individual and the individual must be living at the time of the creation of the trust. See Rev. Rul.
2002–20, 2002–1 C.B. 794, for situations in which the unitrust amount may be paid to a trust for the benefit of an individual
who is financially disabled. An organization described in § 170(c) may receive part, but not all, of the unitrust amount.
Section 664(d)(2)(A) and § 1.664–3(a)(3)(i). See section 6.01 of this revenue procedure foran alternate provision that
provides for payment of part of the unitrust amount to an organization described in § 170(c).
2005–34 I.R.B.328August 22, 2005

(2)Fixed percentage method. Paragraph 2, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.07 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.08 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.09 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(3)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(4)Payment of unitrust amount in installments. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to the recipient annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(5)Rules applicable to valuation. Paragraph 2, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if the valuation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period; and (iii) additional contributions. See § 1.664–3(a)(1)(v) and § 1.664–3(b). See section 5.05(4) for
further guidance related to the valuation date and additional contributions.
(6)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.06(2) of this revenue procedure for additional
information regarding the deferral of the unitrust payment allocable to a testamentary transfer.
(7)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(8)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c). If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotations for Paragraph 3, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
(2)Determining unitrust amount payable in year of recipient’s death. Paragraph 3, Proration of Unitrust Amount, of the sample
trust specifies that the unitrustamountshallbeproratedonadailybasis.Seesection 6.03 of this revenue procedure for an
alternate provision that provides for the termination of thepayment of the unitrust amount with the last regular payment
preceding the recipient’s death.
.04Annotations for Paragraph 4, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(3) of this revenue procedure, with respectto each contribution of
property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least 10
percent of the net fair market value of the property contributed to the trust as of the date of its contribution to the trust.
Section 664(d)(2)(D).
August 22, 20053292005–34 I.R.B.

(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in § 170(c) at the
time of the transfer to the CRUT. See § 664(d)(2)(C). Any named charitable remainderman must also be an organization
described in § 2522(a) to qualify for the gift tax charitable deduction and an organization described in § 2055(a) to qualify
for the estate tax charitable deduction. See Rev. Rul. 77–385,1977–2 C.B. 331. If it is determined that a deduction under
§ 2055(a) will not be necessary in any event, all references to § 2055(a) in the trust instrument may be deleted. The trust
instrument may restrict the charitable remainderman to an organization described in §§ 170(c), 2055(a), and 2522(a), but
grant to a trustee or other person the power to designate theactual charitable remainderman. The gift of the remainder
interest will be incomplete for gift tax purposes if, for example: (i) the donor retains the power to substitute the charitable
remainderman; or (ii) the trust instrument provides the trustee with the power to designate the charitable remainderman
and the donor is not prohibited from serving as trustee. See § 25.2511–2(c). Note, however, that an income tax charitable
deduction is available even if the donor has the authority to substitute the charitable remainderman or the trustee has the
authority to designate the charitable remainderman. Rev. Rul. 68–417, 1968–2 C.B. 103; Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.05 of this revenue procedure for an alternate provision in which the donor retains the right to substitute
the charitable remainderman. See section 6.06 of this revenue procedure for an alternate provision in which the recipient is
granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and 2522(a), and, if needed, § 2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.08(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.05Annotations for Paragraph 5, Additional Contributions, of the Sample Trust.
(1)Identity of additional contributors. For purposes of qualification under this revenue procedure, only a donor or a donor’s
estate may make an additional contribution to the trust. See section 5.01(5) of this revenue procedure for examples of who
may be a donor of a CRUT for purposes of qualification under this revenue procedure.
(2)Proration of additional contributions. Paragraph 5, Additional Contributions, of the sample trust provides a formula for
determining the unitrust amount in each year that an additional contribution is made to the CRUT. If an additional contri-
bution is made in a short taxable year or in the taxable year ofthe recipient’s death, the unitrust amount computed under
paragraph 5 of the sample trust must be prorated pursuant to paragraph 3, Proration of Unitrust Amount, of the sample trust.
(3)Severance of certain additional contributions. If an additional contribution is made to an existing CRUT and the contri-
bution does not satisfy the 10 percent test described in § 664(d)(2)(D), the contribution shall be treated as a transfer to a
separate trust. Section 664(d)(4).
(4)Valuation date in year of additional contribution. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies
a January 1 valuation date for the trust. The formula contained in paragraph 5, Additional Contributions, of the sample
trust may be used when January 1 or any other single date during the taxable year is selected as the valuation date for a
CRUT. Note, however, that if a single date other than January1 is selected as the valuation date for a CRUT, the formulas in
both paragraphs 2 and 5 of the sample trust for computing the unitrust amount will be deficient unless the trust instrument
addresses the possibility that the unitrust period may end before the valuation date, for instance, by providing that in a year
in which the unitrust period ends before the valuation date, “the valuation date” for purposes of paragraph 2 and paragraph
5 shall be the last day of the unitrust period. In addition, if thetrust instrument is drafted to provide for the valuation of trust
assets by averaging the valuations as of multiple specified dates during the trust year, the additional contributions formula
will require modification.
(5)Option to prohibit additional contributions. Paragraph 5, Additional Contributions, of the sample trust provides rules for
determining the unitrust amount payable in a year during which an additional contribution is made to the trust. However,
paragraph 5 of the trust instrument may instead prohibit contributions to the trust after the initial contribution. Section
1.664–3(b). In such an instance, all references to the unitrust amount computed under paragraph 5 must be removed from
the sample trust and paragraph 6, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of the sample trust
should be deleted.
2005–34 I.R.B.330August 22, 2005

.06Annotations for Paragraph 6, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of
theSampleTrust.
(1)Contribution at death of donor. All property passing to a charitable remainder unitrust by reason of the death of the donor
shall be considered to constitute a single contribution. Section 1.664–3(b).
(2)Testamentary additions. If the donor is not the recipient and the donor makes an additional contribution at death whereby
the obligation to pay the unitrust amount with respect to any property passing to the trust by reason of the donor’s death
begins as of the date of the donor’s death, the requirement to pay the portion of the unitrust amount allocable to that contri-
bution may be deferred pursuant to the provisions of § 1.664–1(a)(5)(i). The deferral provision in paragraph 6 of the sample
trust uses the method for computing deferred payments that is provided in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii)
provides an alternate method for determining the amount described in § 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts
payable plus interest on those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123, provides sample language to be included
in the governing instrument if the alternate method set forthin § 1.664–1(a)(5)(ii) for determining the amount described
in § 1.664–1(a)(5)(i)(b) is selected. Note that paragraph 6, Deferral ofthe Unitrust Payment Allocable to Testamentary
Transfer, of the sample trust may be deleted if the donor is the recipient.
.07Annotations for Paragraph 7, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an independent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarketable asset that is valued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a qualified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser while others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the trust to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuation of unmarketable assets.
.08Annotations for Paragraph 8, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipient is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and gift and/or estate tax charitable
deductions are sought for the organization’s interest in theunitrust amount. See § 4947(b)(3). See section 6.01 of this
revenue procedure for an alternate provision that provides for payment of part of the unitrust amount to an organization
described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as modi-
fied by § 4947(a)(1). Except as provided in paragraph 8 of the sample trust, the trust instrument may limit the application of
the provisions of § 508(e) to the period after the termination ofthe unitrust period when the trust continues in existence for
the benefit of the charitable remainderman. Note that when the trust provides for the trust corpus to be retained, in whole
or in part, in trust for the charitable remainderman, the higher deductibility limitations in § 170(b)(1)(A) for the income tax
charitable deduction will not be available (even if the charitable remainderman is restricted to a public charity) because the
contribution of the trust corpus is made “for the use of” rather than “to” the charitable remainderman. See § 1.170A–8(a)
and (b).
August 22, 20053312005–34 I.R.B.

SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — ONE LIFE
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If a gift tax charitable deduction and, if needed, an estate tax charitable deduction are sought for the present
value of the unitrust interest passing to a charitable organization, the trust instrument mustcontain additional provisions.
First, the trust instrument must specify the portion of each unitrust payment that is payable tothe noncharitable recipient
and to the charitable organization described in §§ 170(c), 2522(a), and, if needed, § 2055(a). Second, the trust instrument
must contain a means for selecting an alternative qualified charitable organization if the designated organization is not a
qualified organization at the time when any unitrust amount is to be paid to it. Third, the trust instrument must contain
prohibitions against investments that jeopardize the exempt purpose of the trust within the meaning of § 4944, as modified
by § 4947(a)(2)(A), and against retaining any excess business holdings within the meaning of § 4943, as modified by
§ 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient]percentoftheunitrustamountto[permissible recipient]
(hereinafter “the Recipient”) and [the percentage of the unitrust amount payable to the charitable recipient] percent
of the unitrust amount to [an organization described in §§170(c), 2055(a), and 2522(a) of the Code] (hereinafter “the
Charitable Recipient”). The first day of the unitrust period shall be the date property is first transferred to the trust
and the last day of the unitrust period shall be the date of the Recipient’s death. If the Charitable Recipient is not an
organization described in §§ 170(c), 2055(a), and 2522(a) of the Code at the time when any unitrust payment is to
be distributed to it, then the Trustee shall distribute that unitrust payment to one or more organizations described in
§§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall
decide, in the Trustee’s sole discretion. The unitrust amount shall be paid in equal quarterly installments at the end
of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the
trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market
value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally
determined, the Trustee shall pay to the Recipient and the Charitable Recipient (in the case of an undervaluation)
or receive from the Recipient and the Charitable Recipient (in the case of an overvaluation) an amount equal to the
difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(b)Replace the first parenthetical in paragraph 4, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the Recipient and the Charitable Recipient under the terms of this trust)
(c)Replace each reference to “the Recipient” in paragraph 6, Deferral of the Unitrust Payment Allocable to Testamentary
Transfer, of the sample trust with a reference to“the Recipient and the Charitable Recipient.”
(d)Add the following sentence after the first and only sentence in paragraph 8, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Qualified Contingency.
(1)Explanation
. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency
(as defined in § 664(f)(3)) or the death of the recipient. The amount of the charitable deduction, however, will
be determin
ed without regard to a qualified contingency. See § 664(f)(2).
(2)Instruction
sforuse. Replace the second sentence of paragraph 2, Payment of Unitrust Amount, of the sample trust with
the followi
ng sentence:
The first day
of the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust
period shal
l be the date of the Recipient’s death or, if earlier, the date on which occurs the [qualified contingency].
.03Last Unitrust Payment to the Recipient.
(1)Explanation. As an alternative to prorating the unitrust amount in the taxable year of the recipient’s death, the obligation
to pay the unitrust amount may terminate with the last regular payment preceding the recipient’s death. However, the fact
2005–34 I.R.B.332August 22, 2005

that the recipient may not receive a finalprorated payment shall not be taken into account for purposes of determining
the present value of the remainder interest. Section 1.664–3(a)(5)(i). Note that although the obligation to pay the unitrust
amount may terminate with the last regularpayment preceding the recipient’s death,the trustee must pay to the recipient’s
estate any amounts allocated to the payments payable beforethe recipient’s death that are due as a result of an adjustment
to the unitrust amount payable for that year, as in the case of an undervaluation or an additional contribution.
(2)Instructions for use. Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 2, or, if an additional contribution is made to the trust, the unitrust amount described in paragraph
5. In the taxable year of the trust during which the unitrust period ends, however, the obligation of the Trustee to pay the
unitrust amount shall terminate with the last regular quarterly installment preceding the death of the Recipient.
.04Restricting the Charitable Remainderman to a Public Charity.
(1)Explanation. The amount of the donor’s charitable contribution deduc
tion for income tax purposes may be limited by
the percentage of income limitations described in § 170(b). In genera
l, a larger charitable contribution deduction may be
available for income tax purposes for a contribution to a charitable o
rganization described in § 170(b)(1)(A) than for a
contribution to a private foundation (other than a private foundati
on described in § 170(b)(1)(E)). See § 170(b) and Rev.
Rul. 79–368, 1979–2 C.B. 109. To take advantage of the larger charit
able contribution deduction for income tax purposes,
a donor of an inter vivos CRUT may wish to restrict the charitable rem
ainderman to an organization that is described in
§ 170(b)(1)(A) as well as §§ 170(c), 2055(a), and 2522(a) (referred
to herein as a “public charity”).
(2)Instructions for use. To restrict the charitable remainderman to a
public charity, each and every time the phrase “an organi-
zation described in §§ 170(c), 2055(a), and 2522(a) of the Code” app
ears in the sample trust, replace it with the phrase “an
organization described in §§ 170(b)(1)(A), 170(c), 2055(a), and
2522(a) of the Code.”
.05Retaining the Right to Substitute the Charitable Remainderman.
(1)Explanation. The donor may retain the right to substitute another charitable remainderman for the charitable remainderman
named in the trust instrument. See Rev. Rul. 76–8, 1976–1 C.B. 179. Note, however, that the retention of this right will
cause the gift of the remainder interest to be incomplete for gift tax purposes. See § 25.2511–2(c) and Rev. Rul. 77–275,
1977–2 C.B. 346.
(2)Instructions for use. Insert the following sentence between the first and last sentences of paragraph 4, Distribution to Char-
ity, of the sample trust:
The Donor reserves the right to designate, at any time and from time to time, in lieu of the Charitable Organization
identified above, one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the charitable
remainderman and shall make any such designation by giving written notice to the Trustee.
.06Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant the recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 4, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal
and income of the trust (other than any amount due the Recipient under the terms of this trust) to one or more charitable
organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Recipient shall appoint and direct by spe-
cific reference to this power of appointment by inter vivos ortestamentary instrument. To the extent the Recipient fails
to effectively exercise the power of appointment, the principal and income not effectively appointed shall be distributed
to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and
in the proportions as the Trustee shall decide, in the Trustee’s sole discretion. If an organization fails to qualify as an
organization described in §§ 170(c), 2055(a), and 2522(a) of the Code at the time when any principal or income of the
trust is to be distributed to it, then the Trustee shall distribute the then principal and income to one or more organizations
described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in the proportions as the Trustee
shall decide, in the Trustee’s sole discretion.
.07Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 2 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
August 22, 20053332005–34 I.R.B.

amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [anumbernoless
than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation
date (hereinafter “the fixed percentage amount described in(a)ofparagraph2”)or(b)thetrustincomeforthetaxable
year as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day of each
taxable year of the trust. The first day of the unitrust period shall be the date property is first transferred to the trust
and the last day of the unitrust period shall be the date of the Recipient’s death. The unitrust amount shall be paid in
equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable
year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 5 to determine the unitrust amount payable for that year.
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after
the initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal
to the lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the
sum of (1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and
any post-contribution income from, and appreciation on, such assets during that year) and (2) for each additional
contribution during the year, the fair market value of theassets so added as of the valuation date (including any
post-contribution income from, and appreciation on, such assets through the valuation date) multiplied by a fraction
the numerator of which is the number of days in the period that begins with the date of contribution and ends with
the earlier of the last day of the taxable year or the last dayof the unitrust period and the denominator of which is the
number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last
day in such taxable year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in
(a) of paragraph 5”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. In a taxable year in which an additional contribution is made on or after the valuation date, the assets so
added shall be valued as of the date of contribution, without regard to any post-contribution income or appreciation,
rather than as of the valuation date.
.08Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 2 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.07 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipient in prior years was less than the amounts that would have been paid to the recipient if the unitrust amount
2005–34 I.R.B.334August 22, 2005

had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.07(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number no less than
5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation date
(hereinafter “the fixed percentage amount described in (a)of paragraph 2”) or (b) the trust income for the taxable year
as defined in § 643(b) of the Code and the applicable regulations. The unitrust amount for a taxable year shall also
include any amount of trust income for the year that is in excess of [the fixed percentage amount determined under
(a) of this paragraph for the year], but only to the extent that the aggregate of the amounts paid to the Recipient in
prior years was less than the aggregate of the amounts determined for all prior years under (a) of this paragraph and
(a) of paragraph 5. The valuation date is the first day ofeach taxable year of the trust. The first day of the unitrust
period shall be the date property is first transferred to the trust and the last day of the unitrust period shall be the date
of the Recipient’s death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar
quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to
principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 5 to determine the unitrust amount payable for that year.
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after the
initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal to the
lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the sum of
(1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any post-
contribution income from, and appreciation on, such assetsduring that year) and (2) foreach additional contribution
during the year, the fair market value of the assets so added as of the valuation date (including any post-contribution
income from, and appreciation on, such assets through the valuation date) multiplied by a fraction the numerator of
which is the number of days in the period that begins with thedate of contribution and ends with the earlier of the last
day of the taxable year or the last day of the unitrust period and the denominator of which is the number of days in
the period that begins with the first day of such taxable year and ends with the earlier of the last day in such taxable
year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in (a) of paragraph 5”)
or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The
unitrust amount for that year shall also include any amount of trust income for the year that is in excess of [the fixed
percentage amount determined under (a) of this paragraph for the year], but only to the extent that the aggregate of
the amounts paid to the Recipient in prior years was less than the aggregate of the amounts determined for all prior
years under (a) of paragraph 2 and (a) of this paragraph. In a taxable year in which an additional contribution is made
on or after the valuation date, the assets so added shall be valued as of the date of contribution, without regard to any
post-contribution income or appreciation, rather than as of the valuation date.
.09Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.07 of this revenue procedure) or the net income with make-up
method (described in section 6.08 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method
of calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and
(d)), for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time con-
version from the net income or the net income with make-upmethod to the fixed percentage method of calculation, the
governing instrument must provide that: (i) the change in method is triggered on a specific date or by a single event whose
August 22, 20053352005–34 I.R.B.

occurrence is not discretionary with, or within the control of, the trustees or any other persons; (ii) the change in method
occurs at the beginning of the taxable yearthat immediately follows the taxable yearduring which the permissible triggering
event occurs; and (iii) following the trust’s conversion to thefixed percentage method, the trust will pay at least annually
to the recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described in § 1.664–3(a)(1)(i)(b). Section
1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2) that is not paid by the beginning of the
taxable year immediately following the taxable year during which the permissible triggering event occurs shall be forfeited
by the recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period,
the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount equal to the lesser
of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net fair
market value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 2(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code
and the applicable regulations. The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the
Recipient in each remaining taxable year of the trust during the unitrust period a unitrust amount equal to [same
percentage used in (a) of paragraph 2(i)]percent of the net fair market value of the trust assets as of the valuation
date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay the amount equal to
the lesser of (a) or (b) in paragraph 2(i). The unitrust amount shall be paid in equal quarterly installments at the
end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income
of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date property is first transferred to the trust and the
last day of the unitrust period shall be the date of the Recipient’s death. The valuation date is the first day of each
taxable year of the trust. If, for any year, the net fair market value of the trust assets is incorrectly determined, then
within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in
the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to
the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5(i). In such a year,
this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of
paragraph 2(i) or in (a) of paragraph 5(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 5(ii).
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
2005–34 I.R.B.336August 22, 2005

(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 5(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the trustee shall no longer pay the
amount equal to the lesser of (a) or (b) in paragraph 5(i).
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the
unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount
equal to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent
of the net fair market value of the assets of the trust valuedas of the valuation date (hereinafter “the fixed percentage
amount described in (a) of paragraph 2(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of
the Code and the applicable regulations. The unitrust amount for a taxable year shall also include any amount of
trust income for the year that is in excess of [the fixed percentage amount determined under (a) of paragraph 2(i)
for the year], but only to the extent that the aggregate of the amounts paid to the Recipient in prior years was less
than the aggregate of the amounts determined for all prior years under (a) of paragraph2(i) and (a) of paragraph
5(i). The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from
income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the
Recipient in each remaining taxable year of the trust during the unitrust period a unitrust amount equal to [same
percentage used in (a) of paragraph 2(i)] percent of the net fair market value of the trust assets as of the valuation
date. Beginning on the effective date of the triggeringevent, the Trustee shall no longer pay the amount equal
to the lesser of (a) or (b) in paragraph 2(i) and shall notpay any amount of trust income described in the second
sentence of paragraph 2(i). The unitrust amount shall be paid in equal quarterly installments at the end of each
August 22, 20053372005–34 I.R.B.

calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust
for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date property is first transferred to the trust and the
last day of the unitrust period shall be the date of the Recipient’s death. The valuation date is the first day of each
taxable year of the trust. If, for any year, the net fair market value of the trust assets is incorrectly determined, then
within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in
the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to
the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5(i). In such a year,
this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of
paragraph 2(i) or in (a) of paragraph 5(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 5(ii).
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 5(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
The unitrust amount for that year shall also include any amount of trust income for the year that is in excess of
[the fixed percentage amount determined under (a) of paragraph 5(i) for the year], but only to the extent that the
aggregate of the amounts paid to the Recipient in prior years was less than the aggregate of the amounts determined
for all prior years under (a) of paragraph 2(i) and (a) of this paragraph. In a taxable year in which an additional
contribution is made on or after the valuation date, the assets so added shall be valued as of the date of contribution,
without regard to any post-contribution income or appreciation, rather than as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
2005–34 I.R.B.338August 22, 2005

In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay
the amount equal to the lesser of (a) or (b) in paragraph 5(i) and shall not pay any amount of income described in
the second sentence of paragraph 5(i).
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES
Rev. Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31 are superseded.
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055, 2522; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2, 25.2522(c)–3.)
Rev. Proc. 2005–53
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for an inter vivos charitable remainder unitrust (CRUT) providing for unitrust
payments for a term of years followed by the distribution of trust assets to a charitable remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Service issued sample trust instruments for certain types of CRUTs. The Service is updating the
previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions are
included as further guidance. In addition to the sample trust instrument included in this revenue procedure for an inter vivos CRUT
providing for unitrust payments for a term of years, samples are provided in other separate revenue procedures for:
(a)an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005–52, superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31;
(c)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30 and section 6 of Rev. Proc. 90–31);
(d)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57);
(f)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc. 90–30 and section 8 of Rev. Proc. 90–31); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for an inter vivos CRUT providing for a term of years
unitrust period that is created by an individual who is a citizen or resident of the United States. Section 5 of this revenue procedure
provides annotations to the provisions of the sample trust. Section 6 of this revenue procedure provides samples of certain alternate
provisions concerning: (.01) the payment of part of the unitrust amount to an organization described in § 170(c); (.02) the appor-
tionment of the unitrust amount among members of a named class in the discretion of the trustee;(.03) a qualified contingency;
(.04) the restriction of the charitable remainderman to a public charity; (.05) a retained right to substitute the charitable remainder-
man; (.06) a power of appointment to designate the charitable remainderman; (.07) the net income method of calculating the unitrust
amount; (.08) the net income with make-up method of calculating the unitrust amount; and(.09) a combination of methods for calcu-
lating the unitrust amount.
August 22, 20053392005–34 I.R.B.

For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be de-
ductible by a citizen or resident of the United States under §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) for income, estate, and
gift tax purposes, respectively, if the otherrequirements of §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) (that is, the require-
ments not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust as a qualified CRUT
meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner consistent with the terms
of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is substantially similar to
the sample in section 4 of this revenue procedure; or (ii) properly integrates one ormore alternate provisions from section 6 of this
revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure. A trust that contains
substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly integrated alternate
provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under applicable local law that are
not inconsistent with the applicable federal tax requirements), or that omits any of the provisions of section 4 of this revenue procedure
(unless an alternate provision from section 6 of this revenue procedure is properly integrated), will notnecessarily be disqualified, but
neither will that trust be assured of qualification under the provisions of this revenue procedure. The Service generally will not issue
a letter ruling on whether an inter vivos trust created by an individual and having a term of years unitrust period qualifies as a CRUT.
The Service, however, generally will issue letter rulings on the effect of substantive trust provisions, other than those contained in
sections 4 and 6 of this revenue procedure, on the qualification of a trust as a CRUT.
SECTION 4. SAMPLE INTER VIVOS CHARITABLE REMAINDER UNITRUST — TERM OF YEARS
On thisday of,20,I,(hereinafter “the Donor”), desiring to establish a char-
itable remainder unitrust within the meaning of Rev. Proc. 2005–53 and § 664(d)(2) of the Internal Revenue Code (hereinafter “the
Code”), hereby enter into this trust agreement with
as the initial trustee (hereinafter“the Trustee”). This trust shall
be known as the
Charitable Remainder Unitrust.
1.Funding of Trust. The Donor hereby transfers and irrevocably assigns,on the above date, to the Trustee the property described
in Schedule A, and the Trustee accepts the property and agreesto hold, manage, and distribute theproperty, and any property subse-
quently transferred, under the termsset forth in this trust instrument.
2.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient] (hereinafter “the Recipient”) a unitrust amount equal to [a number no less than 5 and no more than 50] percent of the net fair
market value of the assets of the trust valued as of the first day ofeach taxable year of the trust (hereinafter “the valuation date”). The
unitrust period shall be a period of [a number not more than 20] years. The first day of the unitrust period shall be the date property
is first transferred to the trust and the last day of the unitrust period shall be the day preceding the [ordinal number corresponding
to the length of the unitrust period] anniversary of that date. The unitrust amount shall be paid in equal quarterly installments at the
end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust for a
taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market value of the trust assets
is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the
Recipient (in the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the
difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
3.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2, or, if an additional contribution is made to the trust, the
unitrust amount described in paragraph 5.
4.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Recipient under the terms of this trust) to [designated remainderman] (hereinafter “the
Charitable Organization”). If the Charitable Organization is not an organization described in §§ 170(c), 2055(a), and 2522(a) of the
Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the then principal
and income to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in
the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
5.Additional Contributions. If any additional contributions are made to the trust after the initial contribution, the unitrust amount
for the year in which any additional contribution is made shall be [same percentage used in paragraph 2] percent of the sum of (a)
the net fair market value of the trust assets as of the valuation date(excluding the assets so added and any post-contribution income
from, and appreciation on, such assets duringthat year) and (b) for each additional contribution during the year, the fair market value
of the assets so added as of the valuation date (including any post-contribution income from, and appreciation on, such assets through
the valuation date) multiplied by a fraction the numerator of which is the number of days in the period that begins with the date of
contribution and ends with the earlier of the last day of the taxable year or the last day of the unitrust period and the denominator of
which is the number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last day
in such taxable year or the last day of the unitrust period. In a taxable year in which an additional contribution is made on or after the
valuation date, the assets so added shall be valued as of the date ofcontribution, without regard to any post-contribution income or
appreciation, rather thanas of the valuation date.
2005–34 I.R.B.340August 22, 2005

6.Deferral of the Unitrust Payment Allocable to Testamentary Transfer. All property passing to the trust by reason of the death
of the Donor (hereinafter “the testamentarytransfer”) shall be considered to be a single contribution that is made on the date of the
Donor’s death. Notwithstanding the provisions of paragraphs 2and 5 above, the obligation to pay the unitrust amount with respect
to the testamentary transfer shall commence with the date of the Donor’s death. Nevertheless, payment of the unitrust amount with
respect to the testamentary transfer may be deferred from the date of the Donor’s death until the end of the taxable year in which the
funding of the testamentary transfer is completed. Within a reasonable time after the end of the taxable year in which the testamentary
transfer is completed, the Trustee must pay to the Recipient (inthe case of an underpayment) or receive from the Recipient (in the
case of an overpayment) the difference betweenany unitrust amounts allocable to the testamentary transfer that were actually paid,
plus interest, and the unitrust amounts allocable to the testamentary transfer that were payable, plus interest. The interest shall be
computed for any period at the rate of interest, compounded annually, that the federal income tax regulations under § 664 of the Code
prescribe for this computation.
7.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
8.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
9.Taxable Year. The taxable year of the trustshall be the calendar year.
10.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the
Trustee is prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification
of the trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
11.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
12.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
13.Definition of Recipient. References to the Recipient in this trust instrumentshall be deemed to include the estate of the Recipient
with regard to all provisions in this trust instrument that describe amounts payable to and/or due from the Recipient. The prior sentence
shall not apply to the determination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — TERM OF YEARS
.01Annotations for Introductory Paragraph and Paragraph 1, Funding of Trust, of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 170, § 2055, or § 2522 for property
contributed to the trust. Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition
of, and function exclusively as, a charitable remainder trust from the creation of the trust. Section 1.664–1(a)(4). Solely
for purposes of § 664, a trust is deemed created at the earliest time that neither the grantor nor any other person is treated
as the owner of the entire trust under subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code (subpart E), but in
no event prior to the time property is first transferred to thetrust. Neither the donor nor the donor’s spouse shall be treated
as the owner of the trust under subpart E merely because he or she is named as a recipient of the unitrust amount. Section
1.664–1(a)(4). In addition, funding the trust with certain types of assets may disqualify a charitable remainder trust. See
§ 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.07 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Income tax deductibility limitations. The amount of the charitable deduction for income tax purposes is affected by a number
of factors, including the type of property contributed to the trust, the type of charity receiving the property, whether the
remainder interest is paid outright to charity or held in further trust, and the donor’s adjusted gross income (with certain
adjustments). See § 170(b) and (e); § 1.170A–8; Rev. Rul. 80–38, 1980–1 C.B. 56; and Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.04 of this revenue procedure for an alternate provision that restricts the charitable remainderman to a
public charity (as defined therein).
August 22, 20053412005–34 I.R.B.

(4)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating to the trustee’s duties and powers, as long as the provisions do not
conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder. Note that certain
powers given to certain persons serving as trustee may cause the trustee to be treated as the owner of the trust under subpart
E and thus disqualify the trust as a charitable remainder trust. See § 1.664–1(a)(4).
(5)Identity of donor. For purposes of qualification under this revenue procedure, the donor may be an individual or a husband
and wife. Appropriate adjustments should be made to the introductory paragraph if a husband and wife are the donors.
Terms such as “grantor” or “settlor” may be substituted for “donor.”
.02Annotations for Paragraph 2, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible term. The period for which the unitrust amount is payable must not exceed 20 years. Section 1.664–3(a)(5).
Thus, for example, the unitrust period of a CRUT for a termof 20 years will end on the day preceding the twentieth an-
niversary of the date the trust was created.
(2)Permissible recipients. For a CRUT having a term of years unitrust period, the unitrust amount must generally be paid to
a named person or persons (within the meaning of § 7701(a)(1)). If the unitrust amount is to be paid to an individual or
individuals, all the individuals must be living at the time of the creation of the trust. The unitrust amount may be payable to
the estate or heirs of a named recipient who dies prior to the expiration of the term of years. See Rev. Rul. 74–39, 1974–1
C.B. 156. The unitrust amount may be payable to members of a named class and, because the unitrust period is for a term
of years, all of the members of the class need not be living or ascertainable at the creation of the trust. An organization
described in § 170(c) may receive part, but not all, of the unitrust amount. Section664(d)(2)(A) and § 1.664–3(a)(3)(i). See
section 6.01 of this revenue procedure for an alternate provision that provides for payment of part of the unitrust amount to
an organization described in § 170(c).
(3)Multiple noncharitable recipients. Generally, if the unitrust amount is payableto more than one person, the trust instrument
should describe the interest of each person. See section 6.02 of this revenue procedure for an alternate provision providing
for the apportionment of the unitrust amount among members of a named class in the discretion of the trustee.
(4)Fixed percentage method. Paragraph 2, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.07 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.08 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.09 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(5)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(6)Payment of unitrust amount in installments. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to the recipient annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(7)Rules applicable to valuation. Paragraph 2, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if thevaluation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period; and (iii) additional contributions. See § 1.664–3(a)(1)(v) and § 1.664–3(b). See section 5.05(4) for
further guidance related to the valuation date and additional contributions.
(8)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
2005–34 I.R.B.342August 22, 2005

close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.06(2) of this revenue procedure for additional
information regarding the deferral of the unitrust payment allocable to a testamentary transfer.
(9)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(10)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c). If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotation for Paragraph 3, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
.04Annotations for Paragraph 4, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(5) of this revenue procedure, with respectto each contribution of
property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least 10
percent of the net fair market value of the property contributed to the trust as of the date of its contribution to the trust.
Section 664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in § 170(c) at the
time of the transfer to the CRUT. See § 664(d)(2)(C). Any named charitable remainderman must also be an organization
described in § 2522(a) to qualify for the gift tax charitable deduction and an organization described in § 2055(a) to qualify
for the estate tax charitable deduction. See Rev. Rul. 77–385,1977–2 C.B. 331. If it is determined that a deduction under
§ 2055(a) will not be necessary in any event, all references to § 2055(a) in the trust instrument may be deleted. The trust
instrument may restrict the charitable remainderman to an organization described in §§ 170(c), 2055(a), and 2522(a), but
grant to a trustee or other person the power to designate theactual charitable remainderman. The gift of the remainder
interest will be incomplete for gift tax purposes if, for example: (i) the donor retains the power to substitute the charitable
remainderman; or (ii) the trust instrument provides the trustee with the power to designate the charitable remainderman
and the donor is not prohibited from serving as trustee. See § 25.2511–2(c). Note, however, that an income tax charitable
deduction is available even if the donor has the authority to substitute the charitable remainderman or the trustee has the
authority to designate the charitable remainderman. Rev. Rul. 68–417, 1968–2 C.B. 103; Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.05 of this revenue procedure for an alternate provision in which the donor retains the right to substitute
the charitable remainderman. See section 6.06 of this revenue procedure for an alternate provision in which the recipient is
granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and 2522(a), and, if needed, § 2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.08(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.05Annotations for Paragraph 5, Additional Contributions, of the Sample Trust.
(1)Identity of additional contributors. For purposes of qualification under this revenue procedure, only a donor or a donor’s
estate may make an additional contribution to the trust. See section 5.01(5) of this revenue procedure for examples of who
may be a donor of a CRUT for purposes of qualification under this revenue procedure.
(2)Proration of additional contributions. Paragraph 5, Additional Contributions, of the sample trust provides a formula for
determining the unitrust amount in each year that an additional contribution ismade to the CRUT. If an additional con-
August 22, 20053432005–34 I.R.B.

tribution is made in a short taxable yearor in the taxable year during which the unitrust period ends, the unitrust amount
computed under paragraph 5 of the sample trust must be prorated pursuant to paragraph 3, Proration of Unitrust Amount,
of the sample trust.
(3)Severance of certain additional contributions. If an additional contribution is made to an existing CRUT and the contri-
bution does not satisfy the 10 percent test described in § 664(d)(2)(D), the contribution shall be treated as a transfer to a
separate trust. Section 664(d)(4).
(4)Valuation date in year of additional contribution. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies
a January 1 valuation date for the trust. The formula contained in paragraph 5, Additional Contributions, of the sample
trust may be used when January 1 or any other single date during the taxable year is selected as the valuation date for a
CRUT. Note, however, that if a single date other than January1 is selected as the valuation date for a CRUT, the formulas in
both paragraphs 2 and 5 of the sample trust for computing the unitrust amount will be deficient unless the trust instrument
addresses the possibility that the unitrust period may end before the valuation date, for instance, by providing that in a year
in which the unitrust period ends before the valuation date, “the valuation date” for purposes of paragraph 2 and paragraph
5 shall be the last day of the unitrust period. In addition, if thetrust instrument is drafted to provide for the valuation of trust
assets by averaging the valuations as of multiple specified dates during the trust year, the additional contributions formula
will require modification.
(5)Option to prohibit additional contributions. Paragraph 5, Additional Contributions, of the sample trust provides rules for
determining the unitrust amount payable in a year during which an additional contribution is made to the trust. However,
paragraph 5 of the trust instrument may instead prohibit contributions to the trust after the initial contribution. Section
1.664–3(b). In such an instance, all references to the unitrust amount computed under paragraph 5 must be removed from
the sample trust and paragraph 6, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of the sample trust
should be deleted.
.06Annotations for Paragraph 6, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of
theSampleTrust.
(1)Contribution at death of donor. All property passing to a charitable remainder unitrust by reason of the death of the donor
shall be considered to constitute a single contribution. Section 1.664–3(b).
(2)Testamentary additions. If the donor is not the recipient and the donor makes an additional contribution at death whereby
the obligation to pay the unitrust amount with respect to any property passing to the trust by reason of the donor’s death
begins as of the date of the donor’s death, the requirement to pay the portion of the unitrust amount allocable to that contri-
bution may be deferred pursuant to the provisions of § 1.664–1(a)(5)(i). The deferral provision in paragraph 6 of the sample
trust uses the method for computing deferred payments that is provided in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii)
provides an alternate method for determining the amount described in § 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts
payable plus interest on those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123, provides sample language to be included in
the governing instrument if the alternate method set forth in § 1.664–1(a)(5)(ii) for determining the amount described in
§ 1.664–1(a)(5)(i)(b) is selected.
.07Annotations for Paragraph 7, Unmarketable Assets, of the Sample Trust.
(1)Multiple tru
stees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), may value the
trust’s unm
arketable assets.
(2)Valuation us
ing qualified appraisal or independent trustee. The trustee may alternately use an independent trustee or a
qualified a
ppraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarketable asset that is valued
in one year b
y an independent trustee may be valued in a successive year by a qualified appraiser in a qualified appraisal.
In addition
, within a single year, some unmarketable assets may be valued by a qualified appraiser while others are valued
by an indepe
ndent trustee.
(3)Appointmen
t of independent trustee. The governing instrument may authorize the trustee of the trust to appoint from time
to time an in
dependent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuation of unmarketable assets.
.08Annotations for Paragraph 8, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipient is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
2005–34 I.R.B.344August 22, 2005

for payment of any part of a unitrust amount to an organization described in § 170(c) and gift and/or estate tax charitable
deductions are sought for the organization’s interest in theunitrust amount. See § 4947(b)(3). See section 6.01 of this
revenue procedure for an alternate provision that provides for payment of part of the unitrust amount to an organization
described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as modi-
fied by § 4947(a)(1). Except as provided in paragraph 8 of the sample trust, the trust instrument may limit the application of
the provisions of § 508(e) to the period after the termination ofthe unitrust period when the trust continues in existence for
the benefit of the charitable remainderman. Note that when the trust provides for the trust corpus to be retained, in whole
or in part, in trust for the charitable remainderman, the higher deductibility limitations in § 170(b)(1)(A) for the income tax
charitable deduction will not be available (even if the charitable remainderman is restricted to a public charity) because the
contribution of the trust corpus is made “for the use of” rather than “to” the charitable remainderman. See § 1.170A–8(a)
and (b).
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — TERM OF YEARS
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If a gift tax charitable deduction and, if needed, an estate tax charitable deduction are sought for the present
value of the unitrust interest passing to a charitable organization, the trust instrument mustcontain additional provisions.
First, the trust instrument must specify the portion of each unitrust payment that is payable tothe noncharitable recipient
and to the charitable organization described in §§ 170(c), 2522(a), and, if needed, § 2055(a). Second, the trust instrument
must contain a means for selecting an alternative qualified charitable organization if the designated organization is not a
qualified organization at the time when any unitrust amount is to be paid to it. Third, the trust instrument must contain
prohibitions against investments that jeopardize the exempt purpose of the trust within the meaning of § 4944, as modified
by § 4947(a)(2)(A), and against retaining any excess business holdings within the meaning of § 4943, as modified by
§ 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient]percentoftheunitrustamountto[permissible recipient]
(hereinafter “the Recipient”) and [the percentage of the unitrust amount payable to the charitable recipient] percent
of the unitrust amount to [an organization described in §§ 170(c), 2055(a), and 2522(a) of the Code] (hereinafter “the
Charitable Recipient”). The unitrust period shall be a period of [a number not more than 20] years. The first day of
the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust period shall
be the day preceding the [ordinal number corresponding to the length of the unitrust period] anniversary of that date.
If the Charitable Recipient is not an organization described in §§ 170(c), 2055(a), and 2522(a) of the Code at the time
when any unitrust payment is to be distributed to it, then the Trustee shall distribute that unitrust payment to one or
more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in the
proportions as the Trustee shall decide, in the Trustee’s sole discretion. The unitrust amount shall be paid in equal
quarterly installments at the end of each calendar quarter fromincome and, to the extent income is not sufficient, from
principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for
any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after
the correct value is finally determined, the Trustee shall pay to the Recipient and the Charitable Recipient (in the case
of an undervaluation) or receive from theRecipient and the Charitable Recipient (in the case of an overvaluation) an
amount equal to the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually
paid.
(b)Replace the first parenthetical in paragraph 4, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the Recipient and the Charitable Recipient under the terms of this trust)
(c)Replace each reference to “the Recipient” in paragraph 6 of the sample trust, Deferral of theUnitrust Payment Allocable
to Testamentary Transfer, with a reference to “the Recipient and the Charitable Recipient.”
(d)Add the following sentence after the first and only sentence in paragraph 8, Prohibited Transactions, of the sample trust:
August 22, 20053452005–34 I.R.B.

The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Apportionment of the Unitrust Amount Among Members of a Named Class in the Discretion of the
Trustee.
(1)Explanation. A trust is not a CRUT if any person has the power to alter the amount to be paid to any named person other
than an organization described in § 170(c) if the power wouldcause any person to be treated as the owner of the trust, or
any portion thereof, if subpart E were applicable to the trust. Section 1.664–3(a)(3)(ii). See Rev. Rul. 77–73, 1977–1 C.B.
175. For example, the donor would not be treated as the owner of any portion of a trust if the power is exercisable solely
by an independent trustee or trustees, provided no person hasthe power to add beneficiariesto the class except to provide
for after-born or after-adopted children. Section 674(c). Trustees are independent for purposes of § 674(c) if none of them
is the donor or the donor’s spouse and if no more than half of them are related or subordinate parties who are subservient
to the wishes of the donor. However, an independent trustee’s discretionary power, exercisable solely by that trustee, to
allocate the unitrust amount among themembers of a class would cause the trustee to be treated as the owner of all or a
portion of the trust under § 678(a) if the trustee is a member of the class, if the trustee may apply trust income or corpus to
satisfy the trustee’s own legal obligation, or if the trustee actually exercises the power to satisfy a support obligation owed
by the trustee. Therefore, if any trustee is given the discretionary power exercisable solely by that trustee to allocate the
unitrust amount among members of a class, the trust instrument must provide that such trustee must be: (i) independent;
(ii) not a member of the recipient class; and (iii) prohibited from applying any part of the unitrust payment in satisfaction
of the trustee’s own legal obligation.
(2)Instructions for use.
(a)Add the following sentence to the sample trust:
Any trustee who is authorized in the trustee’s sole discretion to allocate the unitrust amount among members of a
Recipient class must be independent within the meaning of § 674(c) of the Code and must not be a member of the
Recipient class.
(b)Replace the first sentence of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following three
sentences:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to a member or members of a class
of persons comprised of [designated members of class] (hereinafter collectively “the Recipient”) a unitrust amount
equal to [a number no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust
valued as of the first day of each taxable year of the trust (hereinafter “the valuation date”). The Trustee may pay
the unitrust amount to one or more members of the class, inequal or unequal shares, as the Trustee, in the Trustee’s
sole discretion, from time to time may deem advisable. The Trustee may not, however, apply any payment for the
Trustee’s own benefit, or in satisfaction of anysupport or other legal obligation of the Trustee.
.03Qualified Contingency.
(1)Explanation
. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency
(as defined in § 664(f)(3)) or the expiration of the term of years unitrust period. The amount of the charitable
deduction, h
owever, will be determined without regard toa qualified contingency. See § 664(f)(2).
(2)Instruction
sforuse. Replace the second and third sentences of paragraph 2, Payment of Unitrust Amount, of the sample
trust with th
e following two sentences:
The unitrust
period is a period of [not more than 20] years, unless earlier terminated by the occurrence of [qualified
contingency
]. The first day of the unitrust period shall be the date property is first transferred to the trust and the last day
of the unitru
st period shall be the day preceding the [ordinal number corresponding to the length of the unitrust period]
anniversar
y of that date or, if earlier, the date on which occurs the [qualified contingency].
.04Restricting the Charitable Remainderman to a Public Charity.
(1)Explanation. The amount of the donor’s charitable contribution deduction for income tax purposes may be limited by
the percentage of income limitations described in § 170(b). In general, a larger charitable contribution deduction may be
available for income tax purposes for a contribution to a charitable organization described in § 170(b)(1)(A) than for a
contribution to a private foundation (other than a private foundation described in § 170(b)(1)(E)). See § 170(b) and Rev.
Rul. 79–368, 1979–2 C.B. 109. To take advantage of the larger charitable contribution deduction for income tax purposes,
a donor of an inter vivos CRUT may wish to restrict the charitable remainderman to an organization that is described in
§ 170(b)(1)(A) as well as §§ 170(c), 2055(a), and 2522(a) (referred to herein as a “public charity”).
2005–34 I.R.B.346August 22, 2005

(2)Instructions for use. To restrict the charitable remainderman to a public charity, each and every time the phrase “an organi-
zation described in §§ 170(c), 2055(a), and 2522(a) of the Code” appears in the sample trust, replace it with the phrase “an
organization described in §§170(b)(1)(A), 170(c), 2055(a), and 2522(a) of the Code.”
.05Retaining the Right to Substitute the Charitable Remainderman.
(1)Explanation. The donor may retain the right to substitute another charitable remainderman for the charitable remainderman
named in the trust instrument. See Rev. Rul. 76–8, 1976–1 C.B. 179. Note, however, that the retention of this right will
cause the gift of the remainder interest to be incomplete for gift tax purposes. See § 25.2511–2(c) and Rev. Rul. 77–275,
1977–2 C.B. 346.
(2)Instructions for use. Insert the following sentence between the first and last sentences of paragraph 4, Distribution to Char-
ity, of the sample trust:
The Donor reserves the right to designate, at any time and from time to time, in lieu of the Charitable Organization
identified above, one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the charitable
remainderman and shall make any such designation by giving written notice to the Trustee.
.06Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant a recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 4, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal
and income of the trust (other than any amount due the Recipient under the terms of this trust) to one or more charitable
organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Recipient shall appoint and direct by spe-
cific reference to this power of appointment by inter vivos ortestamentary instrument. To the extent the Recipient fails
to effectively exercise the power of appointment, the principal and income not effectively appointed shall be distributed
to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and
in the proportions as the Trustee shall decide, in the Trustee’s sole discretion. If an organization fails to qualify as an
organization described in §§ 170(c), 2055(a), and 2522(a) of the Code at the time when any principal or income of the
trust is to be distributed to it, then the Trustee shall distribute the then principal and income to one or more organizations
described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in the proportions as the Trustee
shall decide, in the Trustee’s sole discretion.
.07Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 2 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first five sentences of paragraph 2, Payment ofUnitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [anumbernoless
August 22, 20053472005–34 I.R.B.

than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation
date (hereinafter “the fixed percentage amount described in(a)ofparagraph2”)or(b)thetrustincomeforthetaxable
year as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day of each
taxable year of the trust. The unitrust period shall be a period of [a number not more than 20] years. The first day of
the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust period shall
be the day preceding the [ordinal number corresponding to the length of the unitrust period] anniversary of that date.
The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income.
Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 5 to determine the unitrust amount payable for that year.
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after
the initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal
to the lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the
sum of (1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and
any post-contribution income from, and appreciation on, such assets during that year) and (2) for each additional
contribution during the year, the fair market value of theassets so added as of the valuation date (including any
post-contribution income from, and appreciation on, such assets through the valuation date) multiplied by a fraction
the numerator of which is the number of days in the period that begins with the date of contribution and ends with
the earlier of the last day of the taxable year or the last dayof the unitrust period and the denominator of which is the
number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last
day in such taxable year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in
(a) of paragraph 5”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. In a taxable year in which an additional contribution is made on or after the valuation date, the assets so
added shall be valued as of the date of contribution, without regard to any post-contribution income or appreciation,
rather than as of the valuation date.
.08Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 2 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.07 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipient in prior years was less than the amounts that would have been paid to the recipient if the unitrust amount
had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.07(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first five sentences of paragraph 2, Payment ofUnitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [anumbernoless
than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation
date (hereinafter “the fixed percentage amount described in(a)ofparagraph2”)or(b)thetrustincomeforthetaxable
year as defined in § 643(b) of the Code and the applicableregulations. The unitrust amount for a taxable year shall
also include any amount of trust income for the year that is in excess of [the fixed percentage amount determined
under (a) of this paragraph for the year], but only to the extent that the aggregate of the amounts paid to the Recipient
in prior years was less than the aggregate of the amounts determined for all prior years under (a) of this paragraph
and (a) of paragraph 5. The valuation date is the first dayof each taxable year of the trust. The unitrust period shall
be a period of [a number not more than 20] years. The first day of the unitrust period shall be the date property
2005–34 I.R.B.348August 22, 2005

is first transferred to the trust and the last day of the unitrust period shall be the day preceding the [ordinal number
corresponding to the length of the unitrust period] anniversary of that date. The unitrust amount shall be paid in equal
quarterly installments at the end of each calendar quarterfrom income. Any income of the trust for a taxable year in
excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 5 to determine the unitrust amount payable for that year.
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after the
initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal to the
lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the sum of
(1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any post-
contribution income from, and appreciation on, such assetsduring that year) and (2) foreach additional contribution
during the year, the fair market value of the assets so added as of the valuation date (including any post-contribution
income from, and appreciation on, such assets through the valuation date) multiplied by a fraction the numerator of
which is the number of days in the period that begins with thedate of contribution and ends with the earlier of the last
day of the taxable year or the last day of the unitrust period and the denominator of which is the number of days in
the period that begins with the first day of such taxable year and ends with the earlier of the last day in such taxable
year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in (a) of paragraph 5”)
or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The
unitrust amount for that year shall also include any amount of trust income for the year that is in excess of [the fixed
percentage amount determined under (a) of this paragraph for the year], but only to the extent that the aggregate of
the amounts paid to the Recipient in prior years was less than the aggregate of the amounts determined for all prior
years under (a) of paragraph 2 and (a) of this paragraph. In a taxable year in which an additional contribution is made
on or after the valuation date, the assets so added shall be valued as of the date of contribution, without regard to any
post-contribution income or appreciation, rather than as of the valuation date.
.09Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.07 of this revenue procedure) or the net income with make-up
method (described in section 6.08 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method
of calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and
(d)), for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time con-
version from the net income or the net income with make-upmethod to the fixed percentage method of calculation, the
governing instrument must provide that: (i) the change in method is triggered on a specific date or by a single event whose
occurrence is not discretionary with, or within the control of, the trustees or any other persons; (ii) the change in method
occurs at the beginning of the taxable yearthat immediately follows the taxable yearduring which the permissible triggering
event occurs; and (iii) following the trust’s conversion to thefixed percentage method, the trust will pay at least annually
to the recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described in § 1.664–3(a)(1)(i)(b). Section
1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2) that is not paid by the beginning of the
taxable year immediately following the taxable year during which the permissible triggering event occurs shall be forfeited
by the recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period,
the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount equal to the lesser
of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net fair
market value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 2(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code
August 22, 20053492005–34 I.R.B.

and the applicable regulations. The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the
Recipient in each remaining taxable year of the trust during the unitrust period a unitrust amount equal to [same
percentage used in (a) of paragraph 2(i)] percent of the net fair market value of the trust assets as of the valuation
date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay the amount equal to
the lesser of (a) or (b) in paragraph 2(i). The unitrust amount shall be paid in equal quarterly installments at the
end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income
of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The unitrust period shall be a period of [a number not more than 20] years. The first day of the unitrust
period shall be the date property is first transferred to the trust and the last day of the unitrust period shall be the
day preceding the [ordinal number corresponding to the length of the unitrust period]anniversary of that date.
The valuation date is the first day of each taxable year of the trust. If, for any year, the net fair market value of the
trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined,
the Trustee shall pay to the Recipient (in the case of an undervaluation) or receive from the Recipient (in the case
of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the
unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5(i). In such a year,
this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of
paragraph 2(i) or in (a) of paragraph 5(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 5(ii).
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 5(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
2005–34 I.R.B.350August 22, 2005

(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the trustee shall no longer pay the
amount equal to the lesser of (a) or (b) in paragraph 5(i).
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the
unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount
equal to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent
of the net fair market value of the assets of the trust valuedas of the valuation date (hereinafter “the fixed percentage
amount described in (a) of paragraph 2(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of
the Code and the applicable regulations. The unitrust amount for a taxable year shall also include any amount of
trust income for the year that is in excess of [the fixed percentage amount determined under (a) of paragraph 2(i)
for the year], but only to the extent that the aggregate of the amounts paid to the Recipient in prior years was less
than the aggregate of the amounts determined for all prior years under (a) of paragraph2(i) and (a) of paragraph
5(i). The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from
income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the
Recipient in each remaining taxable year of the trust during the unitrust period a unitrust amount equal to [same
percentage used in (a) of paragraph 2(i)] percent of the net fair market value of the trust assets as of the valuation
date. Beginning on the effective date of the triggeringevent, the Trustee shall no longer pay the amount equal
to the lesser of (a) or (b) in paragraph 2(i) and shall notpay any amount of trust income described in the second
sentence of paragraph 2(i). The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust
for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The unitrust period shall be a period of [a number not more than 20] years. The first day of the unitrust
period shall be the date property is first transferred to the trust and the last day of the unitrust period shall be the
day preceding the [ordinal number corresponding to the length of the unitrust period]anniversary of that date.
The valuation date is the first day of each taxable year of the trust. If, for any year, the net fair market value of the
trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined,
the Trustee shall pay to the Recipient (in the case of an undervaluation) or receive from the Recipient (in the case
of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the
unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 5(i). In such a year,
this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of
paragraph 2(i) or in (a) of paragraph 5(i) to determine the unitrust amount payable for that year.
August 22, 20053512005–34 I.R.B.

(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 5(ii).
(d)Replace paragraph 5, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 5(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
The unitrust amount for that year shall also include any amount of trust income for the year that is in excess of
[the fixed percentage amount determined under (a) of paragraph 5(i) for the year], but only to the extent that the
aggregate of the amounts paid to the Recipient in prior years was less than the aggregate of the amounts determined
for all prior years under (a) of paragraph 2(i) and (a) of thisparagraph 5(i). In a taxable year in which an additional
contribution is made on or after the valuation date, the assets so added shall be valued as of the date of contribution,
without regard to any post-contribution income or appreciation, rather than as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)or each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay the
amount equal to the lesser of (a) or (b) in paragraph 5(i)and shall not pay any amount of trust income described
in the second sentence of paragraph 5(i).
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
2005–34 I.R.B.352August 22, 2005

26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055, 2522; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2, 25.2522(c)–3.)
Rev. Proc. 2005–54
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for an inter vivos charitable remainder unitrust (CRUT) providing for unitrust
payments payable consecutively for two measuring lives followed by the distribution of trust assetsto a charitable remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Serviceissued sample trust instruments for certain types of CRUTs. The Service is updating
the previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions
are included as further guidance. In addition to the sample trust instrument included in this revenue procedure for an inter vivos
CRUT providing for unitrust payments payable consecutively for twomeasuring lives, samples are provided in other separate revenue
procedures for:
(a)an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005–52, superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(c)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 6 of Rev. Proc. 90–31);
(d)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57);
(f)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc. 90–30 and section 8 of Rev. Proc. 90–31); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for an inter vivos CRUT having consecutive unitrust
interests for two measuring lives that is created by an individual who is a citizen or resident of the United States. Section 5 of this
revenue procedure provides annotations to the provisions of the sample trust. Section 6 of this revenue procedure provides samples
of certain alternate provisions concerning: (.01) the payment of partof the unitrust amount to an organization described in § 170(c);
(.02) a qualified contingency; (.03) a retained right to revoke the interest of the successor recipient; (.04) the last unitrust payments to
the recipients; (.05) the restriction of the charitable remainderman to a public charity; (.06) a retained right to substitute the charitable
remainderman; (.07) a power of appointment to designate the charitable remainderman; (.08) the net income method of calculating the
unitrust amount; (.09) the net income withmake-up method of calculating the unitrust amount; and (.10) a combination of methods
for calculating the unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be de-
ductible by a citizen or resident of the United States under §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) for income, estate, and
gift tax purposes, respectively, if the otherrequirements of §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) (that is, the require-
ments not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust as a qualified CRUT
meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner consistent with the terms
of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is substantially similar to
the sample in section 4 of this revenue procedure; or (ii) properly integrates one ormore alternate provisions from section 6 of this
revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure. A trust that contains
substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly integrated alternate
provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under applicable local law that are
not inconsistent with the applicable federal tax requirements), or that omits any of the provisions of section 4 of this revenue procedure
(unless an alternate provision from section 6 of this revenue procedure is properly integrated), will notnecessarily be disqualified, but
neither will that trust be assured of qualification under the provisions of this revenue procedure. The Service generally will not issue a
letter ruling on whether an inter vivos trust created by an individual and having consecutive unitrust interests for two measuring lives
qualifies as a CRUT. The Service, however, generally will issue letter rulings on the effect ofsubstantive trust provisions, other than
those contained in sections 4 and 6 of this revenue procedure, on the qualification of a trust as a CRUT.
August 22, 20053532005–34 I.R.B.

SECTION 4. SAMPLE INTER VIVOS CHARITABLE REMAINDER UNITRUST — TWO LIVES,
CONSECUTIVE INTERESTS
On thisday of,20,I,(hereinafter “the Donor”), desiring to establish a
charitable remainder unitrust, within the meaning of Rev. Proc. 2005–54 and § 664(d)(2) of the Internal Revenue Code (hereinafter
“the Code”), hereby enter into this trust agreement with
as the initial trustee (hereinafter “the Trustee”). This trust
shall be known as the
Charitable Remainder Unitrust.
1.Funding of Trust. The Donor hereby transfers and irrevocably assigns,on the above date, to the Trustee the property described
in Schedule A, and the Trustee accepts the property and agreesto hold, manage, and distribute theproperty, and any property subse-
quently transferred, under the termsset forth in this trust instrument.
2.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient] (hereinafter “the Initial Recipient”) until the Initial Recipient’s death, and thereafter to [permissible recipient] (hereinafter
“the Successor Recipient”), a unitrust amount equal to [a number no less than 5 and no more than 50] percent of the net fair market
value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter “the valuation date”). The first day
of the unitrust period shall be the date propertyisfirsttransferredtothetrustandthelast day of the unitrust period shall be the date
of the death of the survivor of the Initial Recipient and the Successor Recipient. The unitrust amount shall be paid in equal quarterly
installments at the end of each calendar quarter from income and, tothe extent income is not sufficient, from principal. Any income
of the trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market value
of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee
shall pay to the Initial Recipient and/or theSuccessor Recipient (in the case of an undervaluation) or receive fromthe Initial Recipient
and/or the Successor Recipient (in the case of an overvaluation) anamount equal to the difference between the unitrust amount(s)
properly payable and the unitrust amount(s) actually paid.
3.Payment of Federal Estate Taxes and State Death Taxes. The lifetime unitrust interest of the Successor Recipient will take effect
upon the death of the Initial Recipient only if the Successor Recipient furnishes the funds for payment of any federal estate taxes and
state death taxes for which the Trustee may be liable upon the death of the Initial Recipient. If the funds are not furnished by the
Successor Recipient, the unitrust period shall terminate on the death of the Initial Recipient, notwithstanding any other provision in
this instrument to the contrary.
4.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2, or, if an additional contribution is made to the trust, the
unitrust amount described in paragraph 6. If the Successor Recipient survives the Initial Recipient, the Trustee shall prorate on a daily
basis the next regular unitrust payment due after the death of the Initial Recipient between the estate of the Initial Recipient and the
Successor Recipient.
5.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Initial Recipient and/or the Successor Recipient under the terms of this trust) to [desig-
nated remainderman] (hereinafter “the Charitable Organization”). If the Charitable Organization is not an organization described in
§§ 170(c), 2055(a), and 2522(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the
Trustee shall distribute the then principal and income to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of
the Code as the Trustee shall select, and in the proportions asthe Trustee shall decide, in theTrustee’s sole discretion.
6.Additional Contributions. If any additional contributions are made to the trust after the initial contribution, the unitrust amount
for the year in which any additional contribution is made shall be [same percentage used in paragraph 2] percent of the sum of (a)
the net fair market value of the trust assets as of the valuation date(excluding the assets so added and any post-contribution income
from, and appreciation on, such assets duringthat year) and (b) for each additional contribution during the year, the fair market value
of the assets so added as of the valuation date (including any post-contribution income from, and appreciation on, such assets through
the valuation date) multiplied by a fraction the numerator of which is the number of days in the period that begins with the date of
contribution and ends with the earlier of the last day of the taxable year or the last day of the unitrust period and the denominator of
which is the number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last day
in such taxable year or the last day of the unitrust period. In a taxable year in which an additional contribution is made on or after the
valuation date, the assets so added shall be valued as of the date ofcontribution, without regard to any post-contribution income or
appreciation, rather thanas of the valuation date.
7.Deferral of the Unitrust Payment Allocable to Testamentary Transfer. All property passing to the trust by reason of the death
of the Donor (hereinafter “the testamentarytransfer”) shall be considered to be a single contribution that is made on the date of the
Donor’s death. Notwithstanding the provisions of paragraphs 2and 6 above, the obligation to pay the unitrust amount with respect
to the testamentary transfer shall commence with the date of the Donor’s death. Nevertheless, payment of the unitrust amount with
respect to the testamentary transfer may be deferred from the date of the Donor’s death until the end of the taxable year in which the
funding of the testamentary transfer is completed. Within a reasonable time after the end of the taxable year in which the testamentary
transfer is completed, the Trustee must pay to the Initial Recipient and/or the Successor Recipient (in the case of an underpayment) or
receive from the Initial Recipient and/or theSuccessor Recipient (in the case of an overpayment) the difference between any unitrust
amounts allocable to the testamentary transfer that were actually paid, plus interest, and the unitrust amounts allocable to the testa-
2005–34 I.R.B.354August 22, 2005

mentary transfer that were payable, plus interest. The interest shall be computed for anyperiod at the rate of interest, compounded
annually, that the federal income tax regulations under § 664 of the Code prescribe for this computation.
8.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
9.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
10.Taxable Year. The taxable year of the trust shall be the calendar year.
11.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the
Trustee is prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification
of the trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
12.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
13.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
14.Definition of Initial Recipient and Successor Recipient. References to the Initial Recipient and/or the Successor Recipient
in this trust instrument shall be deemed to include the estate of the Initial Recipient and/or the Successor Recipient with regard to
all provisions in this trust instrument that describe amounts payable to and/or due from the Initial Recipient and/or the Successor
Recipient. The prior sentence shall not apply to thedetermination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONSECUTIVE INTERESTS
.01Annotations for Introductory Paragraph and Paragraph 1, Funding of Trust, of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 170, § 2055, or § 2522 for property
contributed to the trust. Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition
of, and function exclusively as, a charitable remainder trust from the creation of the trust. Section 1.664–1(a)(4). Solely
for purposes of § 664, a trust is deemed created at the earliest time that neither the grantor nor any other person is treated
as the owner of the entire trust under subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code (subpart E), but in
no event prior to the time property is first transferred to thetrust. Neither the donor nor the donor’s spouse shall be treated
as the owner of the trust under subpart E merely because he or she is named as a recipient of the unitrust amount. Section
1.664–1(a)(4). In addition, funding the trust with certain types of assets may disqualify a charitable remainder trust. See
§ 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.08 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Income tax deductibility limitations. The amount of the charitable deduction for income tax purposes is affected by a number
of factors, including the type of property contributed to the trust, the type of charity receiving the property, whether the
remainder interest is paid outright to charity or held in further trust, and the donor’s adjusted gross income (with certain
adjustments). See § 170(b) and (e); § 1.170A–8; Rev. Rul. 80–38, 1980–1 C.B. 56; and Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.05 of this revenue procedure for an alternate provision that restricts the charitable remainderman to a
public charity (as defined therein).
(4)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating tothe trustee’s duties and powers, as long as the provisions do
not conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder.
(5)Identity of donor. For purposes of qualification under this revenue procedure, the donor may be an individual or a husband
and wife. Appropriate adjustments should be made to the introductory paragraph if a husband and wife are the donors.
Terms such as “grantor” or “settlor” may be substituted for “donor.”
August 22, 20053552005–34 I.R.B.

.02Annotations for Paragraph 2, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible recipients. For a CRUT with a unitrust period based on the lives of two individuals, the unitrust amount must
generally be paid to those individuals and both must be living at the time of the creation of the trust. See Rev. Rul. 2002–20,
2002–1 C.B. 794, for situations in which the unitrust amount may be paid to a trust for the benefit of an individual who is
financially disabled. An organization described in § 170(c) may receive part, but not all, of the unitrust amount. Section
664(d)(2)(A) and § 1.664–3(a)(3)(i). See section 6.01 of this revenue procedure for an alternate provision that provides for
payment of part of the unitrust amount toan organization described in § 170(c).
(2)Fixed percentage method. Paragraph 2, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.08 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.09 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.10 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(3)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(4)Payment of unitrust amount in installments. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to a recipient annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(5)Rules applicable to valuation. Paragraph 2, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if thevaluation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period; and (iii) additional contributions. See § 1.664–3(a)(1)(v) and § 1.664–3(b). See section 5.06(4) for
further guidance related to the valuation date and additional contributions.
(6)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.07(2) of this revenue procedure for additional
information regarding the deferral of the unitrust payment allocable to a testamentary transfer.
(7)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(8)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c).If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotation for Paragraph 3, Payment of Federal Estate Taxes and State Death Taxes, of the Sample
Trust.
(1)Tax payment clause. If it is possible that all or part of the fair market value of the trust assets will be includible for federal
estate tax purposes in the gross estate of the donor, the trustmust contain a tax payment clause. If federal estate taxes and
state death taxes are paid from other sources, the tax paymentclause will never become operative. Nevertheless, the tax
payment clause is necessary because it ensures that the trustee will never be required to pay federal estate taxes or state
death taxes from the trust assets. See § 664(d)(2)(B); § 1.664–1(a)(6),Example 3; and Rev. Rul. 82–128, 1982–2 C.B. 71.
2005–34 I.R.B.356August 22, 2005

.04Annotations for Paragraph 4, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
(2)Determining unitrust amount payable in year of each recipient’s death. Paragraph 4, Proration of Unitrust Amount, of the
sample trust specifies that, upon the death of the initial recipient, the next regular unitrust payment due shall be prorated
on a daily basis between the estate of theinitial recipient and the successor recipient. See section 6.04 of this revenue
procedure for an alternate provision thatterminates the payment of the initial recipient’s share of the unitrust amount with
the last regular payment preceding his or her death and/or terminates the payment of the unitrust amount with the last regular
payment preceding the termination of the unitrust period.
.05Annotations for Paragraph 5, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(3) of this revenue procedure, with respectto each contribution of
property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least 10
percent of the net fair market value of the property contributed to the trust as of the date of its contribution to the trust.
Section 664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in § 170(c) at the
time of the transfer to the CRUT. See § 664(d)(2)(C). Any named charitable remainderman must also be an organization
described in § 2522(a) to qualify for the gift tax charitable deduction and an organization described in § 2055(a) to qualify
for the estate tax charitable deduction. See Rev. Rul. 77–385,1977–2 C.B. 331. If it is determined that a deduction under
§ 2055(a) will not be necessary in any event, all references to § 2055(a) in the trust instrument may be deleted. The trust
instrument may restrict the charitable remainderman to an organization described in §§ 170(c), 2055(a), and 2522(a), but
grant to a trustee or other person the power to designate theactual charitable remainderman. The gift of the remainder
interest will be incomplete for gift tax purposes if, for example: (i) the donor retains the power to substitute the charitable
remainderman; or (ii) the trust instrument provides the trustee with the power to designate the charitable remainderman
and the donor is not prohibited from serving as trustee. See § 25.2511–2(c). Note, however, that an income tax charitable
deduction is available even if the donor has the authority to substitute the charitable remainderman or the trustee has the
authority to designate the charitable remainderman. Rev. Rul. 68–417, 1968–2 C.B. 103; Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.06 of this revenue procedure for an alternate provision in which the donor retains the right to substitute
the charitable remainderman. See section 6.07 of this revenueprocedure for an alternate provision in which a recipient is
granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and 2522(a), and, if needed, § 2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.09(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.06Annotations for Paragraph 6, Additional Contributions, of the Sample Trust.
(1)Identity of additional contributors. For purposes of qualification under this revenue procedure, only a donor or a donor’s
estate may make an additional contribution to the trust. See section 5.01(5) of this revenue procedure for examples of who
may be a donor of a CRUT for purposes of qualification under this revenue procedure.
(2)Proration of additional contributions. Paragraph 6, Additional Contributions, of the sample trust provides a formula for
determining the unitrust amount in each year that an additional contribution ismade to the CRUT. If an additional con-
tribution is made in a short taxable yearor in the taxable year during which the unitrust period ends, the unitrust amount
computed under paragraph 6 of the sample trust must be prorated pursuant to paragraph 4, Proration of Unitrust Amount,
of the sample trust.
August 22, 20053572005–34 I.R.B.

(3)Severance of certain additional contributions. If an additional contribution is made to an existing CRUT and the contri-
bution does not satisfy the 10 percent test described in § 664(d)(2)(D), the contribution shall be treated as a transfer to a
separate trust. Section 664(d)(4).
(4)Valuation date in year of additional contribution. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies
a January 1 valuation date for the trust. The formula contained in paragraph 6, Additional Contributions, of the sample
trust may be used when January 1 or any other single date during the taxable year is selected as the valuation date for a
CRUT. Note, however, that if a single date other than January1 is selected as the valuation date for a CRUT, the formulas in
both paragraphs 2 and 6 of the sample trust for computing the unitrust amount will be deficient unless the trust instrument
addresses the possibility that the unitrust period may end before the valuation date, for instance, by providing that in a year
in which the unitrust period ends before the valuation date, “the valuation date” for purposes of paragraph 2 and paragraph
6 shall be the last day of the unitrust period. In addition, if thetrust instrument is drafted to provide for the valuation of trust
assets by averaging the valuations as of multiple specified dates during the trust year, the additional contributions formula
will require modification.
(5)Option to prohibit additional contributions. Paragraph 6, Additional Contributions, of the sample trust provides rules for
determining the unitrust amount payable in a year during which an additional contribution is made to the trust. However,
paragraph 6 of the trust instrument may instead prohibit contributions to the trust after the initial contribution. Section
1.664–3(b). In such an instance, all references to the unitrust amount computed under paragraph 6 must be removed from
the sample trust and paragraph 7, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of the sample trust
should be deleted.
.07Annotations for Paragraph 7, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of
theSampleTrust.
(1)Contribution at death of donor. All property passing to a charitable remainder unitrust by reason of the death of the donor
shall be considered to constitute a single contribution. Section 1.664–3(b).
(2)Testamentary additions. If the donor makes an additional contribution at his or her death whereby the obligation to pay
the unitrust amount with respect to any property passing to the trust by reason of the donor’s death begins as of the date of
the donor’s death, the requirement to pay the portion of the unitrust amount allocable to thatcontribution may be deferred
pursuant to the provisions of § 1.664–1(a)(5)(i). The deferral provision in paragraph 7 of the sample trust uses the method
for computing deferred payments that is provided in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii) provides an alternate
method for determining the amount described in § 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts payable plus interest on
those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123, provides sample language to be included in the governing instrument
if the alternate method set forth in § 1.664–1(a)(5)(ii) for determining the amount described in § 1.664–1(a)(5)(i)(b)is
selected.
.08Annotations for Paragraph 8, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an independent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarketable asset that is valued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a qualified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser while others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the trust to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuation of unmarketable assets.
.09Annotations for Paragraph 9, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipients is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and gift and/or estate tax charitable
deductions are sought for the organization’s interest in theunitrust amount. See § 4947(b)(3). See section 6.01 of this
2005–34 I.R.B.358August 22, 2005

revenue procedure for an alternate provision that provides for payment of part of the unitrust amount to an organization
described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as modi-
fied by § 4947(a)(1). Except as provided in paragraph 9 of the sample trust, the trust instrument may limit the application of
the provisions of § 508(e) to the period after the termination ofthe unitrust period when the trust continues in existence for
the benefit of the charitable remainderman. Note that when the trust provides for the trust corpus to be retained, in whole
or in part, in trust for the charitable remainderman, the higher deductibility limitations in § 170(b)(1)(A) for the income tax
charitable deduction will not be available (even if the charitable remainderman is restricted to a public charity) because the
contribution of the trust corpus is made “for the use of” rather than “to” the charitable remainderman. See § 1.170A–8(a)
and (b).
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONSECUTIVE INTERESTS
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If a gift tax charitable deduction and, if needed, an estate tax charitable deduction are sought for the present
value of the unitrust interest passing to a charitable organization, the trust instrument mustcontain additional provisions.
First, the trust instrument must specify the portion of each unitrust payment that is payable to the noncharitable recipients
and to the charitable organization described in §§ 170(c), 2522(a), and, if needed, § 2055(a). Second, the trust instrument
must contain a means for selecting an alternative qualified charitable organization if the designated organization is not a
qualified organization at the time when any unitrust amount is to be paid to it. Third, the trust instrument must contain
prohibitions against investments that jeopardize the exempt purpose of the trust within the meaning of § 4944, as modified
by § 4947(a)(2)(A), and against retaining any excess business holdings within the meaning of § 4943, as modified by
§ 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
the “valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient] percent of the unitrust amount to [permissible recip-
ient] (hereinafter “the Initial Recipient”), until the Initial Recipient’s death, and thereafter to [permissible recipient]
(hereinafter “the Successor Recipient”).In each taxable year of the trust during the unitrust period, the Trustee shall
pay [the percentage of unitrust amount payable to the charitable recipient] percent of the unitrust amount to [an or-
ganization described in §§ 170(c), 2055(a), and 2522(a) of the Code] (hereinafter “the Charitable Recipient”). The
first day of the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust
period shall be the date of the death of the survivor of the Initial Recipient and the Successor Recipient. If the Chari-
table Recipient is not an organization described in §§ 170(c), 2055(a), and 2522(a) of the Code at the time when any
unitrust payment is to be distributed to it, then the Trustee shall distribute that unitrust payment to one or more orga-
nizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in the proportions
as the Trustee shall decide, in the Trustee’s sole discretion. The unitrust amount shall be paid in equal quarterly in-
stallments at the end of each calendar quarter from income and,to the extent income is not sufficient, from principal.
Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for any
year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after the
correct value is finally determined, the Trustee shall pay to the Initial Recipient and/or the Successor Recipient and
the Charitable Recipient (in the case of an undervaluation) or receive from the Initial Recipient and/or the Successor
Recipient and the Charitable Recipient (in the case of an overvaluation) an amount equal to the difference between
the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(b)Replace the first parenthetical in paragraph 5, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the InitialRecipient and/or the Successor Recipient and the Charitable Recipient under
the terms of this trust)
(c)Replace each reference to “the Initial Recipient and/or Successor Recipient” in paragraph 7, Deferral of the Unitrust
Payment Allocable to Testamentary Transfer, of the sample trust with a reference to “the Initial Recipient and/or Suc-
cessor Recipient and the Charitable Recipient.”
August 22, 20053592005–34 I.R.B.

(d)Add the following sentence after the first and only sentence in paragraph 9, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Qualified Contingency.
(1)Explanation. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency (as defined in § 664(f)(3)) or the death of the survivor of the initial recipient and the successor recipient. The
amount of the charitable deduction, however, will be determined without regard to a qualified contingency. See § 664(f)(2).
(2)Instructions for use. Replace the second sentence of paragraph 2, Payment of Unitrust Amount, of the sample trust with
the following sentence:
The first day of the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust
period shall be the date of the death of the survivor of the Initial Recipient and the Successor Recipient or, if earlier, the
date on which occurs the [qualified contingency].
.03Retaining the Right to Revoke the Interest of the Successor Recipient.
(1)Explanation. The donor may retain the right to revoke or terminate the interest of a noncharitable recipient. This right is
exercisable only by the donor’s last will and testament. Section 1.664–3(a)(4). The retention of this right may have gift and
estate tax consequences. It will affect the value of the unitrust interests transferred. It may also cause a portion of the trust
to be included in the donor’s gross estate for federal estate taxpurposes, even if it would otherwise not be includible. The
following alternate provision provides for the donor’s retention of the right to revoke the interest of the successor recipient
when the donor is the initial recipient.
(2)Instructions for use. To retain the right to revoke the successor recipient’s interest by thedonor’s last will and testament:
(a)Designate the donor as the initial recipient in paragraph 2, Payment of Unitrust Amount, of the sample trust.
(b)Replace the second sentence of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following two
sentences:
The Donor hereby expressly reserves the power, exercisable only by the Donor’s last will and testament, to revoke
and terminate the interest of the Successor Recipient under this trust. The first day of the unitrust period shall be the
date property is first transferred to the trust and the last day of the unitrust period shall be the date of the death of the
survivor of the Initial Recipient andthe Successor Recipient or, if the powerto revoke the interest of the Successor
Recipient is exercised by the Donor, the date of the Initial Recipient’s death.
.04Last Unitrust Payments to the Recipients.
(1)Explanation. As an alternative to prorating the unitrust amount in the taxable year of the initial recipient’s death, the obli-
gation to pay the unitrust amount to the initial recipient mayterminate with the last regular payment preceding the initial
recipient’s death. Similarly, as an alternative to proratingthe unitrust amount in the taxable year of the successor recipi-
ent’s death, the obligation to pay the unitrust amount may terminate with the last regular payment preceding the successor
recipient’s death. However, the fact that a recipient may not receive a finalprorated payment shall not be taken into account
for purposes of determining the present value of the remainder interest. Section 1.664–3(a)(5)(i). Note that although the
obligation to pay the unitrust amount to a recipient may terminate with the last regular payment preceding that recipient’s
death, the trustee must pay a recipient’s estate any amounts allocated to the payments payable before the recipient’s death
that are due as a result of an adjustment to the unitrust amount payable for that year, as in the case of an undervaluation or
an additional contribution.
(2)Instructions for use.
(a)To add an alternate provision to terminate the payment of the unitrust amount to the initial recipient with the last regular
payment preceding his or her death, replace paragraph 4, Proration of Unitrust Amount, ofthe sample trust with the
following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the unitrust amount described in paragraph 2, or, if an additional
contribution is made to the trust, the unitrust amount described in paragraph 6. If the Successor Recipient survives
the Initial Recipient, the obligation of the Trustee to pay the unitrust amount to the Initial Recipient shall terminate
with the last regular quarterly installment preceding the death of the Initial Recipient, and the entire amount of the
first regular quarterly installment after the death of the Initial Recipient shall be paid to the Successor Recipient.
(b)To add an alternate provision to terminate the payment of the unitrust amount with the last regular payment preceding
the termination of the unitrust period, replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the
following paragraph:
2005–34 I.R.B.360August 22, 2005

Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 2, or, if an additional contribution ismade to the trust, the unitrust amount described in para-
graph 6. If the Successor Recipient survives the Initial Recipient, the Trustee shall prorate on a daily basis the next
regular unitrust payment due after the death of the Initial Recipient between the estate of the Initial Recipient and
the Successor Recipient. In the taxable year of the trust during which the unitrust period ends, the obligation of the
Trustee to pay the unitrust amount shall terminate with the last regular quarterly installment preceding the death of
the survivor of the Initial Recipient and the Successor Recipient.
(c)To add an alternate provision terminating the payment of the unitrust amount to the initial recipient with the last regular
payment preceding his or her death, and terminating the payment of the unitrust amount with the last regular payment
preceding the termination of the unitrust period, replace paragraph 4, Prorationof Annuity Amount, of the sample trust
with the following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 2, or, if an additional contribution ismade to the trust, the unitrust amount described in para-
graph 6. If the Successor Recipient survives the Initial Recipient, the obligation of the Trustee to pay the unitrust
amount to the Initial Recipient shall terminate with the last regular quarterly installment preceding the death of the
Initial Recipient, and the entire amount of the first regular quarterly installment after the death of the Initial Recipient
shall be paid to the Successor Recipient. In the taxable yearof the trust during which theunitrust period ends, the
obligation of the Trustee to pay the unitrust amount shall terminate with the last regular quarterly installment preced-
ing the death of the survivor of the Initial Recipient and the Successor Recipient.
.05Restricting the Charitable Remainderman to a Public Charity.
(1)Explanation. The amount of the donor’s charitable contribution deduction for income tax purposes may be limited by
the percentage of income limitations described in § 170(b). In general, a larger charitable contribution deduction may be
available for income tax purposes for a contribution to a charitable organization described in § 170(b)(1)(A) than for a
contribution to a private foundation (other than a private foundation described in § 170(b)(1)(E)). See § 170(b) and Rev.
Rul. 79–368, 1979–2 C.B. 109. To take advantage of the larger charitable contribution deduction for income tax purposes,
a donor of an inter vivos CRUT may wish to restrict the charitable remainderman to an organization that is described in
§ 170(b)(1)(A) as well as §§ 170(c), 2055(a), and 2522(a) (referred to herein as a “public charity”).
(2)Instructions for use. To restrict the charitable remainderman to a public charity, each and every time the phrase “an organi-
zation described in §§ 170(c), 2055(a), and 2522(a) of the Code” appears in the sample trust, replace it with the phrase “an
organization described in §§170(b)(1)(A), 170(c), 2055(a), and 2522(a) of the Code.”
.06Retaining the Right to Substitute the Charitable Remainderman.
(1)Explanation. The donor may retain the right to substitute another charitable remainderman for the charitable remainderman
named in the trust instrument. See Rev. Rul. 76–8, 1976–1 C.B. 179. Note, however, that the retention of this right will
cause the gift of the remainder interest to be incomplete for gift tax purposes. See § 25.2511–2(c) and Rev. Rul. 77–275,
1977–2 C.B. 346.
(2)Instructions for use. Insert the following sentence between the first and last sentences of paragraph 5, Distribution to Char-
ity, of the sample trust:
The Donor reserves the right to designate, at any time and from time to time, in lieu of the Charitable Organization
identified above, one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the charitable
remainderman and shall make any such designation by giving written notice to the Trustee.
.07Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant a recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 5, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal
and income of the trust (other than any amount due the Initial Recipient and/or the Successor Recipient under the terms
of this trust) to one or more charitable organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as [one
of the named permissible recipients] shall appoint and direct by specific reference to this power of appointment by inter
vivos or testamentary instrument. To the extent this power of appointment is noteffectively exercised, the principal
and income not effectively appointed shall be distributed toone or more organizations described in §§ 170(c), 2055(a),
and 2522(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee’s
sole discretion. If an organization fails to qualify as an organization described in §§ 170(c), 2055(a), and 2522(a) of the
Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the
August 22, 20053612005–34 I.R.B.

then principal and income to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the
Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
.08Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 2 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Initial Recipient”) until the Initial Recipient’s death, and thereafter to [permissible recipient] (hereinafter “the
Successor Recipient”), a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number
no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the
valuation date (hereinafter “the fixed percentage amountdescribed in (a) of paragraph 2”) or (b) the trust income for
the taxable year as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day
of each taxable year of the trust. The first day of the unitrust period shall be the date property is first transferred to
the trust and the last day of the unitrust period shall be thedate of the death of the survivor of the Initial Recipient and
the Successor Recipient. The unitrust amount shall be paidin equal quarterly installments at the end of each calendar
quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to
principal.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 6 to determine the unitrust amount payable for that year. If the Successor Recipient
survives the Initial Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the
death of the Initial Recipient between the estate of the Initial Recipient andthe Successor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after
the initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal
to the lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the
sum of (1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and
any post-contribution income from, and appreciation on, such assets during that year) and (2) for each additional
contribution during the year, the fair market value of theassets so added as of the valuation date (including any
post-contribution income from, and appreciation on, such assets through the valuation date) multiplied by a fraction
the numerator of which is the number of days in the period that begins with the date of contribution and ends with
the earlier of the last day of the taxable year or the last dayof the unitrust period and the denominator of which is the
number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last
day in such taxable year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in
2005–34 I.R.B.362August 22, 2005

(a) of paragraph 6”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. In a taxable year in which an additional contribution is made on or after the valuation date, the assets so
added shall be valued as of the date of contribution, without regard to any post-contribution income or appreciation,
rather than as of the valuation date.
.09Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 2 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.08 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipients in prior years was less than the amounts that would have been paid to the recipients if the unitrust amount
had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.08(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Initial Recipient”) until the Initial Recipient’s death, and thereafter to [permissible recipient] (hereinafter “the
Successor Recipient”), a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [anumberno
less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation
date (hereinafter “the fixed percentage amount described in(a)ofparagraph2”)or(b)thetrustincomeforthetaxable
year as defined in § 643(b) of the Code and the applicableregulations. The unitrust amount for a taxable year shall
also include any amount of trust income for the year that is in excess of [the fixed percentage amount determined
under (a) of this paragraph for the year], but only to the extent that the aggregate of the amounts paid in prior years,
whether to the Initial Recipient or to the Successor Recipient, was less than theaggregate of the amounts determined
for all prior years under (a) of this paragraph and (a) of paragraph 6. The valuation date is the first day of each taxable
year of the trust. The first day of the unitrust period shall bethe date property is first transferred to the trust and the
last day of the unitrust period shall be the date of the death of the survivor of the Initial Recipient and the Successor
Recipient. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from
income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 6 to determine the unitrust amount payable for that year. If the Successor Recipient
survives the Initial Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the
death of the Initial Recipient between the estate of the Initial Recipient andthe Successor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after
the initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal
to the lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the
sum of (1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and
any post-contribution income from, and appreciation on, such assets during that year) and (2) for each additional
contribution during the year, the fair market value of theassets so added as of the valuation date (including any
post-contribution income from, and appreciation on, such assets through the valuation date) multiplied by a fraction
the numerator of which is the number of days in the period that begins with the date of contribution and ends with
the earlier of the last day of the taxable year or the last dayof the unitrust period and the denominator of which is the
number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last
day in such taxable year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in
(a) of paragraph 6”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. The unitrust amount for that year shall also include any amount of trust income for the year that is in
August 22, 20053632005–34 I.R.B.

excess of [the fixed percentage amount determined under (a) of this paragraph for the year], but only to the extent
that the aggregate of the amounts paid in prior years, whether to the Initial Recipient or to the Successor Recipient,
was less than the aggregate of the amounts determined forall prior years under (a) of paragraph 2 and (a) of this
paragraph. In a taxable year in which an additional contribution is made on or after the valuation date, the assets so
added shall be valued as of the date of contribution, without regard to any post-contribution income or appreciation,
rather than as of the valuation date.
.10Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.08 of this revenue procedure) or the net income with make-up
method (described in section 6.09 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method of
calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and(d)),
for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time conversion
from the net income or the net income with make-up method tothe fixed percentage method of calculation, the governing
instrument must provide that: (i) the change in method is triggeredonaspecificdateorbyasingle event whose occurrence
is not discretionary with, or within the control of, the trustees or any other persons; (ii)the change in method occurs at
the beginning of the taxable year that immediately follows the taxable year during which the permissible triggering event
occurs; and (iii) following the trust’s conversion to the fixed percentage method, the trust will pay at least annually to the
initial recipient and/or the successor recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described in
§ 1.664–3(a)(1)(i)(b). Section 1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2)thatis
not paid by the beginning of the taxable year immediately following the taxable year during which the permissible trigger-
ing event occurs shall be forfeited bythe initial recipient and/or successor recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period, the
Trustee shall pay to [permissible recipient] (hereinafter “the Initial Recipient”) until the InitialRecipient’s death,
and thereafter to [permissible recipient] (hereinafter “the Successor Recipient”), a unitrust amount equal to the
lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net
fair market value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 2(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code
and the applicable regulations. The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable
year of the trust during the unitrust period, the Trustee shall pay to the Initial Recipient until his or her death, and
thereafter to the Successor Recipient, a unitrust amount equal to [same percentage used in (a) of paragraph 2(i)]
percent of the net fair market value of the trust assets asof the valuation date. Beginning on the effective date of
the triggering event, the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in paragraph 2(i).
The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income
and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of
the unitrust amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date property is first transferred to the trust and the last
day of the unitrust period shall be the date of the death of the survivor of the Initial Recipient and the Successor
Recipient. The valuation date is the first day of each taxable year of the trust. If, for any year, the net fair market
value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally
determined, the Trustee shall pay to the Initial Recipient and/or the Successor Recipient (in the case of an under-
valuation) or receive from the Initial Recipient and/or the Successor Recipient (in the case of an overvaluation) an
amount equal to the difference between the unitrust amount(s) properly payable and theunitrust amount(s) actually
paid.
2005–34 I.R.B.364August 22, 2005

(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6(i). In such a short
taxable year, this prorated fixed percentage amount shall be used in place ofthe fixed percentage amount described
in (a) of paragraph 2(i) or in (a) of paragraph 6(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 6(ii).
(iii)Proration of unitrust amount between Initial Recipient and Successor Recipient. If the Successor Recipient sur-
vives the Initial Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the
death of the Initial Recipient between the estate of the Initial Recipient and the Successor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 6(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the trustee shall no longer pay the
amount equal to the lesser of (a) or (b) in paragraph 6(i).
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
August 22, 20053652005–34 I.R.B.

PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the
unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter “the Initial Recipient”) until the Ini-
tial Recipient’s death, and thereafter to [permissible recipient] (hereinafter “the Successor Recipient”), a unitrust
amount equal to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than
50] percent of the net fair market value of the assets of the trust valued as of the valuation date (hereinafter “the
fixed percentage amount described in (a) of paragraph 2(i)”) or (b) the trust income for the taxable year as defined
in § 643(b) of the Code and the applicable regulations. Theunitrust amount for a taxable year shall also include
any amount of trust income forthe year that is in excess of [the fixed percentage amount determined under (a) of
paragraph 2(i) for the year], but only to the extent that the aggregate of the amounts paid in prior years, whether
to the Initial Recipient or to the Successor Recipient, was less than the aggregate of the amounts determined for
all prior years under (a) of paragraph 2(i) and (a) of paragraph 6(i). The unitrust amount shall be paid in equal
quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable year
in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable
year of the trust during the unitrust period, the Trustee shall pay to the Initial Recipient until his or her death, and
thereafter to the Successor Recipient, a unitrust amount equal to [same percentage used in (a) of paragraph 2(i)]
percent of the net fair market value of the trust assets asof the valuation date. Beginning on the effective date of
the triggering event, the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in paragraph 2(i),
and shall not pay any amount of trust income described in the second sentence of paragraph 2(i). The unitrust
amount shall be paid in equal quarterly installments at the end of each calendar quarter from income and, to the
extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust
amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date property is first transferred to the trust and the last
day of the unitrust period shall be the date of the death of the survivor of the Initial Recipient and the Successor
Recipient. The valuation date is the first day of each taxable year of the trust. If, for any year, the net fair market
value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally
determined, the Trustee shall pay to the Initial Recipient and/or the Successor Recipient (in the case of an under-
valuation) or receive from the Initial Recipient and/or the Successor Recipient (in the case of an overvaluation) an
amount equal to the difference between the unitrust amount(s) properly payable and theunitrust amount(s) actually
paid.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6(i). In such a short
taxable year, this prorated fixed percentage amount shall be used in place ofthe fixed percentage amount described
in (a) of paragraph 2(i) or in (a) of paragraph 6(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 6(ii).
(iii)Proration of unitrust amount between Initial Recipient and Successor Recipient. If the Successor Recipient sur-
vives the Initial Recipient, the Trusteeshall prorate on a daily basis the next regular unitrust payment due after the
death of the Initial Recipient between the estate of the Initial Recipient and the Successor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event.Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
2005–34 I.R.B.366August 22, 2005

(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 6(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
The unitrust amount for that year shall also include any amount of trust income for the year that is in excess of
[the fixed percentage amount determined under (a) of paragraph 6(i) for the year], but only to the extent that the
aggregate of the amounts paid in prior years, whether to the Initial Recipient or to the Successor Recipient, was
less than the aggregate of the amounts determined for all prior years under (a) of paragraph 2(i) and under (a) of
paragraph 6(i). In a taxable year in which an additional contribution is made on or after the valuation date, the
assets so added shall be valued as of the date of contribution, without regard to any post-contribution income or
appreciation, rather than as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay
the amount equal to the lesser of (a) or (b) in paragraph 6(i) and shall not pay any amount of income described in
the second sentence of paragraph 6(i).
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES
Section 4 of Rev. Proc. 90–30 and section 5of Rev. Proc. 90–31 are superseded.
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055, 2522; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2, 25.2522(c)–3.)
Rev. Proc. 2005–55
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for an inter vivos charitable remainder unitrust (CRUT) providing for unitrust
payments payable concurrently and consecutively for two measuring lives followed by the distribution of trust assets to a charitable
remainderman.
August 22, 20053672005–34 I.R.B.

SECTION 2. BACKGROUND
Previously, the Internal Revenue Serviceissued sample trust instruments for certain types of CRUTs. The Service is updating
the previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions
are included as further guidance. In addition to the sample trust instrument included in this revenue procedure for an inter vivos
CRUT providing for unitrust payments payable concurrently and consecutively for two measuring lives, samples are provided in
other separate revenue procedures for:
(a)an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005–52, superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(c)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31);
(d)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57);
(f)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc. 90–30 and section 8 of Rev. Proc. 90–31); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for an inter vivos CRUT having concurrent and consecu-
tive unitrust interests for two measuring lives that is created by an individual who is a citizen or resident of the United States. Section
5 of this revenue procedure provides annotations to the provisions of the sample trust. Section 6 of this revenue procedure provides
samples of certain alternate provisions concerning: (.01) the payment of part of the unitrust amount to an organization described in
§ 170(c); (.02) a qualified contingency; (.03) a retained right to revoke the interest of the survivor recipient; (.04) the last unitrust
payments to the recipients; (.05) the restriction of the charitable remainderman to a public charity; (.06) a retained right to substitute
the charitable remainderman; (.07) a power of appointment to designate the charitable remainderman; (.08) the net income method of
calculating the unitrust amount; (.09) the net income with make-up method of calculating the unitrust amount; and (.10) a combination
of methods for calculating the unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be de-
ductible by a citizen or resident of the United States under § 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) for income, estate, and
gift tax purposes, respectively, if the otherrequirements of §§ 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) (that is, the require-
ments not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust as a qualified CRUT
meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner consistent with the terms
of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is substantially similar to
the sample in section 4 of this revenue procedure; or (ii) properly integrates one ormore alternate provisions from section 6 of this
revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure. A trust that contains
substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly integrated alternate
provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under applicable local law that are
not inconsistent with the applicable federal tax requirements), or that omits any of the provisions of section 4 of this revenue procedure
(unless an alternate provision from section 6 of this revenue procedure is properly integrated), will not necessarily be disqualified,
but neither will that trust be assured of qualification under the provisions of this revenue procedure. The Service generally will not
issue a letter ruling on whether an inter vivos trust created by an individual and having concurrent and consecutive unitrust interests
for two measuring lives qualifies as a CRUT. The Service, however, generally will issue letter rulings on the effect of substantive trust
provisions, other than those contained in sections 4 and 6 of this revenue procedure, on the qualification of a trust as a CRUT.
SECTION 4. SAMPLE INTER VIVOS CHARITABLE REMAINDER UNITRUST — TWO LIVES,
CONCURRENT AND CONSECUTIVE INTERESTS
On thisday of,20,I,(hereinafter “the Donor”), desiring to establish a
charitable remainder unitrust within the meaning of Rev. Proc.2005–55 and § 664(d)(2) of the Internal Revenue Code (hereinafter
“the Code”), hereby enter into this trust agreement with
as the initial trustee (hereinafter “the Trustee”). This trust
shall be known as the
Charitable Remainder Unitrust.
1.Funding of Trust. The Donor hereby transfers and irrevocably assigns,on the above date, to the Trustee the property described
in Schedule A, and the Trustee accepts the property and agreesto hold, manage, and distribute theproperty, and any property subse-
quently transferred, under the termsset forth in this trust instrument.
2005–34 I.R.B.368August 22, 2005

2.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient]andto[permissible recipient] (hereinafter “the Recipients”) in equal shares during their joint lives, a unitrust amount equal
to [a number no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the
first day of each taxable year of the trust (hereinafter “the valuation date”) and, upon thedeath of one (hereinafter “the Predeceasing
Recipient”), the Trustee shall pay the entire unitrust amount to the survivor (hereinafter“the Survivor Recipient”). The first day of
the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust period shall be the date of
the Survivor Recipient’s death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter
from income and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the
unitrust amount shall be added to principal. If, for any year, the net fair market value ofthe trust assets is incorrectly determined, then
within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Predeceasing Recipient and/or
the Survivor Recipient (in the case of an undervaluation) or receive from the Predeceasing Recipient and/or the Survivor Recipient
(in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the unitrust
amount(s) actually paid.
3.Payment of Federal Estate Taxes and State Death Taxes. The lifetime unitrust interest of theSurvivor Recipient will take effect
upon the death of the Predeceasing Recipient only if the Survivor Recipient furnishes the funds for payment of any federal estate taxes
and state death taxes for which the Trusteemay be liable upon the death of the Predeceasing Recipient. If the funds are not furnished
by the Survivor Recipient, the unitrust period shall terminate on the death of thePredeceasing Recipient, notwithstanding any other
provision in this instrument to the contrary.
4.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2, or, if an additional contribution is made to the trust, the
unitrust amount described in paragraph 6. Upon the death of the Predeceasing Recipient, the Trustee shall prorate on a daily basis the
next regular unitrust payment due after the death of the Predeceasing Recipient between the estate of the Predeceasing Recipient and
the Survivor Recipient.
5.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Predeceasing Recipient and/or the Survivor Recipient under the terms of this trust) to [des-
ignated remainderman] (hereinafter “the Charitable Organization”). If the Charitable Organization isnot an organization described
in §§ 170(c), 2055(a), and 2522(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the
Trustee shall distribute the then principal and income to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of
the Code as the Trustee shall select, and in the proportions asthe Trustee shall decide, in theTrustee’s sole discretion.
6.Additional Contributions. If any additional contributions are made to the trust after the initial contribution, the unitrust amount
for the year in which any additional contribution is made shall be [same percentage used in paragraph 2] percent of the sum of (a)
the net fair market value of the trust assets as of the valuation date(excluding the assets so added and any post-contribution income
from, and appreciation on, such assets duringthat year) and (b) for each additional contribution during the year, the fair market value
of the assets so added as of the valuation date (including any post-contribution income from, and appreciation on, such assets through
the valuation date) multiplied by a fraction the numerator of which is the number of days in the period that begins with the date of
contribution and ends with the earlier of the last day of the taxable year or the last day of the unitrust period and the denominator of
which is the number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last day
in such taxable year or the last day of the unitrust period. In a taxable year in which an additional contribution is made on or after the
valuation date, the assets so added shall be valued as of the date ofcontribution, without regard to any post-contribution income or
appreciation, rather thanas of the valuation date.
7.Deferral of the Unitrust Payment Allocable to Testamentary Transfer. All property passing to the trust by reason of the death
of the Donor (hereinafter “the testamentarytransfer”) shall be considered to be a single contribution that is made on the date of the
Donor’s death. Notwithstanding the provisions of paragraphs 2and 6 above, the obligation to pay the unitrust amount with respect
to the testamentary transfer shall commence with the date of the Donor’s death. Nevertheless, payment of the unitrust amount with
respect to the testamentary transfer may be deferred from the date of the Donor’s death until the end of the taxable year in which the
funding of the testamentary transfer is completed. Within a reasonable time after the end of the taxable year in which the testamentary
transfer is completed, the Trustee must pay to the Predeceasing Recipient and/or the Survivor Recipient (in the case of an under-
payment) or receive from the Predeceasing Recipient and/or the Survivor Recipient (in the case of an overpayment) the difference
between any unitrust amounts allocable to the testamentary transfer that were actually paid, plus interest, and the unitrust amounts
allocable to the testamentary transfer that were payable, plus interest. The interest shall be computed for any period at the rate of
interest, compounded annually, that the federal income tax regulations under § 664 of the Code prescribe for this computation.
8.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
August 22, 20053692005–34 I.R.B.

9.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
10.Taxable Year. The taxable year of the trust shall be the calendar year.
11.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the
Trustee is prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification
of the trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
12.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
13.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
14.Definition of Predeceasing Recipient and Survivor Recipient. References to the Predeceasing Recipient and/or the Survivor
Recipient in this trust instrument shall be deemed to include the estate of the Predeceasing Recipient and/or theSurvivor Recipient
with regard to all provisions in this trust instrument that describe amounts payable to and/or due from the Predeceasing Recipient
and/or the Survivor Recipient. The prior sentence shall not apply to the determination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONCURRENT AND CONSECUTIVE INTERESTS
.01Annotations for Introductory Paragraph and Paragraph 1, Funding of Trust, of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 170, § 2055, or § 2522 for property
contributed to the trust. Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition
of, and function exclusively as, a charitable remainder trust from the creation of the trust. Section 1.664–1(a)(4). Solely
for purposes of § 664, a trust is deemed created at the earliest time that neither the grantor nor any other person is treated
as the owner of the entire trust under subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code (subpart E), but in
no event prior to the time property is first transferred to thetrust. Neither the donor nor the donor’s spouse shall be treated
as the owner of the trust under subpart E merely because he or she is named as a recipient of the unitrust amount. Section
1.664–1(a)(4). In addition, funding the trust with certain types of assets may disqualify a charitable remainder trust. See
§ 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.08 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Income tax deductibility limitations. The amount of the charitable deduction for income tax purposes is affected by a number
of factors, including the type of property contributed to the trust, the type of charity receiving the property, whether the
remainder interest is paid outright to charity or held in further trust, and the donor’s adjusted gross income (with certain
adjustments). See § 170(b) and (e); § 1.170A–8; Rev. Rul. 80–38, 1980–1 C.B. 56; and Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.05 of this revenue procedure for an alternate provision that restricts the charitable remainderman to a
public charity (as defined therein).
(4)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating tothe trustee’s duties and powers, as long as the provisions do
not conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder.
(5)Identity of donor. For purposes of qualification under this revenue procedure, the donor may be an individual or a husband
and wife. Appropriate adjustments should be made to the introductory paragraph if a husband and wife are the donors.
Terms such as “grantor” or “settlor” may be substituted for “donor.”
.02Annotations for Paragraph 2, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible recipients. For a CRUT with a unitrust period based on the lives of two individuals, the unitrust amount must
generally be paid to those individuals and both must be living at the time of the creation of the trust. See Rev. Rul. 2002–20,
2002–1 C.B. 794, for situations in which the unitrust amount may be paid to a trust for the benefit of an individual who is
financially disabled. An organization described in § 170(c) may receive part, but not all, of the unitrust amount. Section
664(d)(2)(A) and § 1.664–3(a)(3)(i). See section 6.01 of this revenue procedure for an alternate provision that provides for
payment of part of the unitrust amount toan organization described in § 170(c).
2005–34 I.R.B.370August 22, 2005

(2)Fixed percentage method. Paragraph 2, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.08 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.09 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.10 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(3)Division of unitrust amount between recipients. The sample trust provides that while both recipients are alive they will
share the unitrust amount equally and, upon the death of the predeceasing recipient,the survivor recipient will receive all
of the unitrust amount, subject to any proration in paragraph 4. However, the unitrust amount may be divided other than
equally during the joint lives of the recipients. In addition, the share ofthe predeceasing recipient may be made payable to
an organization described in § 170(c) for the rest of the survivor recipient’s life.
(4)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(5)Payment of unitrust amount in installments. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to the recipients annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(6)Rules applicable to valuation. Paragraph 2, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if the valuation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period; and (iii) additional contributions. See § 1.664–3(a)(1)(v) and § 1.664–3(b). See section 5.06(4) for
further guidance related to the valuation date and additional contributions.
(7)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.07(2) of this revenue procedure for additional
information regarding the deferral of the unitrust payment allocable to a testamentary transfer.
(8)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(9)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c). If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotation for Paragraph 3, Payment of Federal Estate Taxes and State Death Taxes, of the Sample
Trust.
(1)Tax payment clause. If it is possible that all or part of the fair market value of the trust assets will be includible for federal
estate tax purposes in the gross estate of the donor, the trustmust contain a tax payment clause. If federal estate taxes and
state death taxes are paid from other sources, the tax paymentclause will never become operative. Nevertheless, the tax
payment clause is necessary because it ensures that the trustee will never be required to pay federal estate taxes or state
death taxes from the trust assets. See § 664(d)(2)(B); § 1.664–1(a)(6),Example 3; and Rev. Rul. 82–128, 1982–2 C.B. 71.
August 22, 20053712005–34 I.R.B.

.04Annotations for Paragraph 4, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
(2)Determining unitrust amount payable in year of each recipient’s death. Paragraph 4, Proration of Unitrust Amount, of
the sample trust specifies that, upon the death of the predeceasing recipient,the next regular unitrust payment due shall
be prorated on a daily basis between the estate of the predeceasing recipient and the survivor recipient. See section 6.04
of this revenue procedure for an alternate provision that terminates the payment of the predeceasing recipient’s share of
the unitrust amount with the last regular payment preceding his or her death and/or terminates the payment of the unitrust
amount with the last regular payment preceding the termination of the unitrust period.
.05Annotations for Paragraph 5, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(4) of this revenue procedure, with respectto each contribution of
property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least 10
percent of the net fair market value of the property contributed to the trust as of the date of its contribution to the trust.
Section 664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in § 170(c) at the
time of the transfer to the CRUT. See § 664(d)(2)(C). Any named charitable remainderman must also be an organization
described in § 2522(a) to qualify for the gift tax charitable deduction and an organization described in § 2055(a) to qualify
for the estate tax charitable deduction. See Rev. Rul. 77–385,1977–2 C.B. 331. If it is determined that a deduction under
§ 2055(a) will not be necessary in any event, all references to § 2055(a) in the trust instrument may be deleted. The trust
instrument may restrict the charitable remainderman to an organization described in §§ 170(c), 2055(a), and 2522(a), but
grant to a trustee or other person the power to designate theactual charitable remainderman. The gift of the remainder
interest will be incomplete for gift tax purposes if, for example: (i) the donor retains the power to substitute the charitable
remainderman; or (ii) the trust instrument provides the trustee with the power to designate the charitable remainderman
and the donor is not prohibited from serving as trustee. See § 25.2511–2(c). Note, however, that an income tax charitable
deduction is available even if the donor has the authority to substitute the charitable remainderman or the trustee has the
authority to designate the charitable remainderman. Rev. Rul. 68–417, 1968–2 C.B. 103; Rev. Rul. 79–368, 1979–2 C.B.
109. See section 6.06 of this revenue procedure for an alternate provision in which the donor retains the right to substitute
the charitable remainderman. See section 6.07 of this revenueprocedure for an alternate provision in which a recipient is
granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and 2522(a), and, if needed, § 2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.09(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.06Annotations for Paragraph 6, Additional Contributions, of the Sample Trust.
(1)Identity of additional contributors.For purposes of qualification under this revenue procedure, only a donor or a donor’s
estate may make an additional contribution to the trust. See section 5.01(5) of this revenue procedure for examples of who
may be a donor of a CRUT for purposes of qualification under this revenue procedure.
(2)Proration of additional contributions. Paragraph 6, Additional Contributions, of the sample trust provides a formula for
determining the unitrust amount in each year that an additional contribution ismade to the CRUT. If an additional con-
tribution is made in a short taxable yearor in the taxable year during which the unitrust period ends, the unitrust amount
computed under paragraph 6 of the sample trust must be prorated pursuant to paragraph 4, Proration of Unitrust Amount,
of the sample trust.
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(3)Severance of certain additional contributions. If an additional contribution is made to an existing CRUT and the contri-
bution does not satisfy the 10 percent test described in § 664(d)(2)(D), the contribution shall be treated as a transfer to a
separate trust. Section 664(d)(4).
(4)Valuation date in year of additional contribution. Paragraph 2, Payment of Unitrust Amount, of the sample trust specifies
a January 1 valuation date for the trust. The formula contained in paragraph 6, Additional Contributions, of the sample
trust may be used when January 1 or any other single date during the taxable year is selected as the valuation date for a
CRUT. Note, however, that if a single date other than January 1 is selected as the valuation date for a CRUT, the formulas in
both paragraphs 2 and 6 of the sample trust for computing the unitrust amount will be deficient unless the trust instrument
addresses the possibility that the unitrust period may end before the valuation date, for instance, by providing that in a year
in which the unitrust period ends before the valuation date, “the valuation date” for purposes of paragraph 2 and paragraph
6 shall be the last day of the unitrust period. In addition, if thetrust instrument is drafted to provide for the valuation of trust
assets by averaging the valuations as of multiple specified dates during the trust year, the additional contributions formula
will require modification.
(5)Option to prohibit additional contributions. Paragraph 6, Additional Contributions, of the sample trust provides rules for
determining the unitrust amount payable in a year during which an additional contribution is made to the trust. However,
paragraph 6 of the trust instrument may instead prohibit contributions to the trust after the initial contribution. Section
1.664–3(b). In such an instance, all references to the unitrust amount computed under paragraph 6 must be removed from
the sample trust and paragraph 7, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of the sample trust
should be deleted.
.07Annotations for Paragraph 7, Deferral of the Unitrust Payment Allocable to Testamentary Transfer, of
theSampleTrust.
(1)Contribution at death of donor. All property passing to a charitable remainder unitrust by reason of the death of the donor
shall be considered to constitute a single contribution. Section 1.664–3(b).
(2)Testamentary additions. If the donor makes an additional contribution at his or her death whereby the obligation to pay
the unitrust amount with respect to any property passing to the trust by reason of the donor’s death begins as of the date of
the donor’s death, the requirement to pay the portion of the unitrust amount allocable to thatcontribution may be deferred
pursuant to the provisions of § 1.664–1(a)(5)(i). The deferral provision in paragraph 7 of the sample trust uses the method
for computing deferred payments that is provided in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii) provides an alternate
method for determining the amount described in § 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts payable plus interest on
those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123, provides sample language to be included in the governing instrument
if the alternate method set forth in § 1.664–1(a)(5)(ii) for determining the amount described in § 1.664–1(a)(5)(i)(b)is
selected.
.08Annotations for Paragraph 8, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an independent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarketable asset that is valued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a qualified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser while others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the trust to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuation of unmarketable assets.
.09Annotations for Paragraph 9, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipients is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and gift and estate tax charitable
deductions are sought for the organization’s interest in theunitrust amount. See § 4947(b)(3). See section 6.01 of this
August 22, 20053732005–34 I.R.B.

revenue procedure for an alternate provision that provides for payment of part of the unitrust amount to an organization
described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as modi-
fied by § 4947(a)(1). Except as provided in paragraph 9 of the sample trust, the trust instrument may limit the application of
the provisions of § 508(e) to the period after the termination ofthe unitrust period when the trust continues in existence for
the benefit of the charitable remainderman. Note that when the trust provides for the trust corpus to be retained, in whole
or in part, in trust for the charitable remainderman, the higher deductibility limitations in § 170(b)(1)(A) for the income tax
charitable deduction will not be available (even if the charitable remainderman is restricted to a public charity) because the
contribution of the trust corpus is made “for the use of” rather than “to” the charitable remainderman. See § 1.170A–8(a)
and (b).
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE INTER VIVOS CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONCURRENT AND CONSECUTIVE INTERESTS
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If a gift tax charitable deduction and, if needed, an estate tax charitable deduction are sought for the present
value of the unitrust interest passing to a charitable organization, the trust instrument mustcontain additional provisions.
First, the trust instrument must specify the portion of each unitrust payment that is payable to the noncharitable recipients
and to the charitable organization described in §§ 170(c), 2522(a), and, if needed, § 2055(a). Second, the trust instrument
must contain a means for selecting an alternative qualified charitable organization if the designated organization is not a
qualified organization at the time when any unitrust amount is to be paid to it. Third, the trust instrument must contain
prohibitions against investments that jeopardize the exempt purpose of the trust within the meaning of § 4944, as modified
by § 4947(a)(2)(A), and against retaining any excess business holdings within the meaning of § 4943, as modified by
§ 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient]percentoftheunitrustamountto[permissible recipient]
and [permissible recipient] (hereinafter “the Recipients”) in equal shares during their joint lives and, upon the death
of one (hereinafter “the Predeceasing Recipient”), the Trustee shall pay that entire percentage of the unitrust amount
to the survivor (hereinafter “the Survivor Recipient”). In each taxable year ofthe trust during theunitrust period,
the Trustee shall pay [the percentage of unitrust amount payable to the charitable recipient] percent of the unitrust
amount to [an organization described in §§ 170(c), 2055(a), and 2522(a) of the Code] (hereinafter “the Charitable
Recipient”). The first day of the unitrust period shall be the date property is first transferred to the trust and the last
day of the unitrust period shall be the date of the SurvivorRecipient’s death. If the Charitable Recipient is not an
organization described in §§ 170(c), 2055(a), and 2522(a) of the Code at the time when any unitrust payment is to
be distributed to it, then the Trustee shall distribute that unitrust payment to one or more organizations described in
§§ 170(c), 2055(a), and 2522(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall
decide, in the Trustee’s sole discretion. The unitrust amount shall be paid in equal quarterly installments at the end
of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the
trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market
value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally
determined, the Trustee shall pay to the Predeceasing Recipient and/or the Survivor Recipient and the Charitable
Recipient (in the case of an undervaluation) or receive from the Predeceasing Recipient and/or the Survivor Recipient
and the Charitable Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust
amount(s) properly payable and the unitrust amount(s) actually paid.
(b)Replace the first parenthetical in paragraph 5, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the Predeceasing Recipient and/or the Survivor Recipient and the Charitable Recipient
under the terms of this trust)
2005–34 I.R.B.374August 22, 2005

(c)Replace each reference to “the Predeceasing Recipient and/or Survivor Recipient” in paragraph 7, Deferral of the Uni-
trust Payment Allocable to Testamentary Transfer, of the sample trust with a reference to “the Predeceasing Recipient
and/or Survivor Recipient andthe Charitable Recipient.”
(d)Add the following sentence after the first and only sentence in paragraph 9, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Qualified Contingency.
(1)Explanation. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency (as defined in § 664(f)(3)) or the death of the survivor recipient. The amount of the charitable deduction,
however, will be determined without regard to a qualified contingency. See § 664(f)(2).
(2)Instructions for use. Replace the second sentence of paragraph 2, Payment of Unitrust Amount, of the sample trust with
the following sentence:
The first day of the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust
period shall be the date of the Survivor Recipient’s death or, if earlier, the date on which occurs the [qualified contin-
gency].
.03Retaining the Right to Revoke the Interest of the Survivor Recipient.
(1)Explanation. The donor may retain the right to revoke or terminate the interest of a noncharitable recipient. This right is
exercisable only by the donor’s last will and testament. Section 1.664–3(a)(4). The retention of this right may have gift and
estate tax consequences. It will affect the value of the unitrust interests transferred. It may also cause a portion of the trust
to be included in the donor’s gross estate for federal estate taxpurposes, even if it would otherwise not be includible. The
following alternate provision provides for the donor’s retention of the right to revoke the interest of the survivor recipient
when the donor is also a recipient.
(2)Instructions for use. To retain the right to revoke the interest of the survivor recipient by the donor’s last will and testament:
(a)Designate the donor as a recipient in paragraph 2, Payment of Unitrust Amount, of the sample trust.
(b)Replace the second sentence of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following two
sentences:
The Donor hereby expressly reserves the power, exercisable only by the Donor’s last will and testament, to revoke
and terminate the interest of [the name of permissible recipient who is not the Donor] under this trust. The first day
of the unitrust period shall be the date property is first transferred to the trust and the last day of the unitrust period
shall be the date of the Survivor Recipient’s death or, if the power to revoke the interest of [the name of permissible
recipient who is not the Donor] is exercised, the earlier date of the Donor’s death.
.04Last Unitrust Payments to the Recipients.
(1)Explanation. As an alternative to prorating the unitrust amount in the taxable year of the predeceasing recipient’s death,
the obligation to pay the predeceasing recipient’s share of the unitrust amount mayterminate with the last regular payment
preceding the predeceasing recipient’s death. Similarly, as an alternative to prorating the unitrust amount in the taxable
year of the survivor recipient’s death, the obligation to pay the unitrust amount may terminate with the last regular payment
preceding the survivor recipient’s death. However, the fact that a recipient may not receive a final prorated payment shall
not be taken into account for purposes of determining the present value of the remainder interest. Section 1.664–3(a)(5)(i).
Note that although the obligation to pay the unitrust amount or, in the case of the predeceasing recipient, a share of the
unitrust amount, to a recipient may terminate with the last regular payment preceding that recipient’s death, the trustee
must pay a recipient’s estate any amounts allocated to the payments payable before the recipient’s death that are due as a
result of an adjustment to the unitrust amount payable for that year, as in the case of an undervaluation or an additional
contribution.
(2)Instructions for use.
(a)To add an alternate provision to terminate the payment of thepredeceasing recipient’s shareof the unitrust amount with
the last regular payment preceding his or her death, replaceparagraph 4, Proration of Unitrust Amount, of the sample
trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends,
the Trustee shall prorate on a daily basis the unitrust amount described in paragraph 2, or, if an additional contribution
is made to the trust, the unitrust amount described in paragraph 6. Upon the death of thePredeceasing Recipient, the
obligation of the Trustee to pay a share of the unitrust amount to the Predeceasing Recipient shall terminate with the
August 22, 20053752005–34 I.R.B.

last regular quarterly installment preceding the death of the Predeceasing Recipient, and the Predeceasing Recipient’s
share of the unitrust amount shall thereafter be added to and paid as part of the share of the Survivor Recipient.
(b)To add an alternate provision to terminate the payment of the unitrust amount with the last regular payment preceding
the termination of the unitrust period, replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the
following paragraph.
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 2, or, if an additional contribution ismade to the trust, the unitrust amount described in para-
graph 6. Upon the death of the Predeceasing Recipient, the Trustee shall prorate on a daily basis the next regular
unitrust payment due after the death of the Predeceasing Recipient between the estate of the Predeceasing Recipient
and the Survivor Recipient. In the taxable year of the trust during which the unitrust period ends, the obligation of
the Trustee to pay the unitrust amount shall terminate withthe last regular quarterly installment preceding the death
of the Survivor Recipient.
(c)To add an alternate provision terminating the payment of the predeceasing recipient’s share of the unitrust amount with
the last regular payment preceding his or her death, and terminating the payment of the unitrust amount with the last
regular payment preceding the termination of the unitrust period, replace paragraph 4, Proration of Annuity Amount, of
the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 2, or, if an additional contribution ismade to the trust, the unitrust amount described in para-
graph 6. Upon the death of the Predeceasing Recipient, the obligation of the Trustee to pay a share of the unitrust
amount to the Predeceasing Recipient shall terminate with the last regular quarterly installment preceding the death
of the Predeceasing Recipient, and the Predeceasing Recipient’s share of the unitrust amount shall thereafter be added
to and paid as part of the share of the Survivor Recipient.In the taxable year of the trust during which the unitrust
period ends, the obligation of the Trustee to pay the unitrust amount shall terminate with the last regular quarterly
installment preceding the death of the Survivor Recipient.
.05Restricting the Charitable Remainderman to a Public Charity.
(1)Explanation. The amount of the donor’s charitable contribution deduction for income tax purposes may be limited by
the percentage of income limitations described in § 170(b). In general, a larger charitable contribution deduction may be
available for income tax purposes for a contribution to a charitable organization described in § 170(b)(1)(A) than for a
contribution to a private foundation (other than a private foundation described in § 170(b)(1)(E)). See § 170(b) and Rev.
Rul. 79–368, 1979–2 C.B. 109. To take advantage of the larger charitable contribution deduction for income tax purposes,
a donor of an inter vivos CRUT may wish to restrict the charitable remainderman to an organization that is described in
§ 170(b)(1)(A) as well as §§ 170(c), 2055(a), and 2522(a) (referred to herein as a “public charity”).
(2)Instructions for use. To restrict the charitable remainderman to a public charity, each and every time the phrase “an organi-
zation described in §§ 170(c), 2055(a), and 2522(a) of the Code” appears in the sample trust, replace it with the phrase “an
organization described in §§170(b)(1)(A), 170(c), 2055(a), and 2522(a) of the Code.”
.06Retaining the Right to Substitute the Charitable Remainderman.
(1)Explanation. The donor may retain the right to substitute another charitable remainderman for the charitable remainderman
named in the trust instrument. See Rev. Rul. 76–8, 1976–1 C.B. 179. Note, however, that the retention of this right will
cause the gift of the remainder interest to be incomplete for gift tax purposes. See § 25.2511–2(c) and Rev. Rul. 77–275,
1977–2 C.B. 346.
(2)Instructions for use. Insert the following sentence between the first and last sentences of paragraph 5, Distribution to Char-
ity, of the sample trust:
The Donor reserves the right to designate, at any time and from time to time, in lieu of the Charitable Organization
identified above, one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the charitable
remainderman and shall make any such designation by giving written notice to the Trustee.
.07Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant a recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 5, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal
and income of the trust (other than any amount due the Predeceasing Recipient and/or the Survivor Recipient under the
terms of this trust) to one or more charitable organizationsdescribed in §§ 170(c), 2055(a), and 2522(a) of the Code as
[one of the named permissible recipients] shall appoint and direct by specific reference to this power of appointment by
2005–34 I.R.B.376August 22, 2005

inter vivos or testamentary instrument. To the extent this power of appointment is not effectively exercised, the principal
and income not effectively appointed shall be distributed toone or more organizations described in §§ 170(c), 2055(a),
and 2522(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee’s
sole discretion. If an organization fails to qualify as an organization described in §§ 170(c), 2055(a), and 2522(a) of the
Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the
then principal and income to one or more organizations described in §§ 170(c), 2055(a), and 2522(a) of the Code as the
Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
.08Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 2 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient]andto
[permissible recipient] (hereinafter “the Recipients”) in equal sharesduring their joint lives, a unitrust amount equal
to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the
net fair market value of the assets of the trust valued as of thevaluation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 2”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and
the applicable regulations. Upon the death of one of the Recipients (hereinafter “the Predeceasing Recipient”), the
Trustee shall pay the entire unitrust amount to the survivor (hereinafter “the Survivor Recipient”). The valuation date
is the first day of each taxable year of the trust. The first dayof the unitrust period shall be the date property is first
transferred to the trust and the last day of the unitrust period shall be the date of the Survivor Recipient’s death. The
unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income. Any
income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 6 to determine the unitrust amount payable for that year. Upon the death of the
Predeceasing Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death
of the Predeceasing Recipient between the estate of the Predeceasing Recipient andthe Survivor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after
the initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal
to the lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the
sum of (1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and
any post-contribution income from, and appreciation on, such assets during that year) and (2) for each additional
contribution during the year, the fair market value of theassets so added as of the valuation date (including any
August 22, 20053772005–34 I.R.B.

post-contribution income from, and appreciation on, such assets through the valuation date) multiplied by a fraction
the numerator of which is the number of days in the period that begins with the date of contribution and ends with
the earlier of the last day of the taxable year or the last dayof the unitrust period and the denominator of which is the
number of days in the period that begins with the first day of such taxable year and ends with the earlier of the last
day in such taxable year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in
(a) of paragraph 6”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. In a taxable year in which an additional contribution is made on or after the valuation date, the assets so
added shall be valued as of the date of contribution, without regard to any post-contribution income or appreciation,
rather than as of the valuation date.
.09Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 2 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.08 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipients in prior years was less than the amounts that would have been paid to the recipients if the unitrust amount
had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.08(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 2, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient]andto
[permissible recipient] (hereinafter “the Recipients”) in equal sharesduring their joint lives, a unitrust amount equal
to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the
net fair market value of the assets of the trust valued as of thevaluation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 2”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and
the applicable regulations. The unitrust amount for a taxable year shall also include any amount of trust income for
the year that is in excess of [the fixed percentage amount determined under (a) of this paragraph for the year], but
only to the extent that the aggregate of the amounts paid to the Recipients in prior years was less than the aggregate
of the amounts determined for all prior years under (a) of this paragraph and (a) of paragraph 6. Upon the death of
one of the Recipients (hereinafter “the Predeceasing Recipient”), the Trusteeshall pay the entire unitrust amount to
the survivor (hereinafter “the Survivor Recipient”). The valuation date is the first day of each taxable year of the
trust. The first day of the unitrust period shall be the date property is first transferred to the trust and the last day
of the unitrust period shall be the date of the Survivor Recipient’s death. The unitrust amount shall be paid in equal
quarterly installments at the end of each calendar quarterfrom income. Any income of the trust for a taxable year in
excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2, or, if an
additional contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 2 or in (a) of paragraph 6 to determine the unitrust amount payable for that year. Upon the death of the
Predeceasing Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death
of the Predeceasing Recipient between the estate of the Predeceasing Recipient andthe Survivor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions. Notwithstanding paragraph 2, if any additional contributions are made to the trust after the
initial contribution, the unitrust amount for the year in which any additional contribution is made shall be equal to the
lesser of (a) a fixed percentage amount equal to [same percentage used in (a) of paragraph 2] percent of the sum of
(1) the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any post-
contribution income from, and appreciation on, such assetsduring that year) and (2) foreach additional contribution
during the year, the fair market value of the assets so added as of the valuation date (including any post-contribution
income from, and appreciation on, such assets through the valuation date) multiplied by a fraction the numerator of
2005–34 I.R.B.378August 22, 2005

which is the number of days in the period that begins with thedate of contribution and ends with the earlier of the last
day of the taxable year or the last day of the unitrust period and the denominator of which is the number of days in
the period that begins with the first day of such taxable year and ends with the earlier of the last day in such taxable
year or the last day of the unitrust period (hereinafter “the fixed percentage amount described in (a) of paragraph 6”)
or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The
unitrust amount for that year shall also include any amount of trust income for the year that is in excess of [the fixed
percentage amount determined under (a) of this paragraph for the year], but only to the extent that the aggregate of
the amounts paid to the Recipients in prior years was less than the aggregate of the amounts determined for all prior
years under (a) of paragraph 2 and (a) of this paragraph. In a taxable year in which an additional contribution is made
on or after the valuation date, the assets so added shall be valued as of the date of contribution, without regard to any
post-contribution income or appreciation, rather than as of the valuation date.
.10Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.08 of this revenue procedure) or the net income with make-up
method (described in section 6.09 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method of
calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and(d)),
for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time conversion
from the net income or the net income with make-up method tothe fixed percentage method of calculation, the governing
instrument must provide that: (i) the change in method is triggeredonaspecificdateorbyasingle event whose occurrence
is not discretionary with, or within the control of, the trustees or any other persons; (ii)the change in method occurs at
the beginning of the taxable year that immediately follows the taxable year during which the permissible triggering event
occurs; and (iii) following the trust’s conversion to the fixed percentage method, the trust will pay at least annually to the
predeceasing recipient and/or the survivor recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described
in § 1.664–3(a)(1)(i)(b). Section 1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2)that
is not paid by the beginning of the taxable year immediately following the taxable year during which the permissible trig-
gering event occurs shall be forfeited by the predeceasing recipient and/or the survivor recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period, the
Trustee shall pay to [permissible recipient]andto[permissible recipient] (hereinafter “the Recipients”) in equal
shares during their joint lives, a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a
number no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued
as of the valuation date (hereinafter “the fixed percentage amount described in (a) of paragraph 2(i)”) or (b) the
trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. Upon the
death of one of the Recipients (hereinafter “the Predeceasing Recipient”), the Trustee shall pay the entire unitrust
amount to the survivor (hereinafter “the Survivor Recipient”). The unitrust amount shall be paid in equal quarterly
installments at the end of each calendar quarter from income. Any income of the trust for a taxable year in excess
of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable
year of the trust during the unitrust period, the Trustee shall pay to the Recipients in equal shares during their joint
lives a unitrust amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the net fair market value
of the trust assets as of the valuation date, and, upon thedeath of the Predeceasing Recipient, the Trustee shall pay
the entire unitrust amount to the Survivor Recipient. Beginning on the effective date of the triggering event, the
Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in paragraph 2(i). The unitrust amount shall
be paid in equal quarterly installments at the end of eachcalendar quarter from income and, to the extent income
is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall
be added to principal.
August 22, 20053792005–34 I.R.B.

(iii)In general. The first day of the unitrust period shall be the date property is first transferred to the trust and the
last day of the unitrust period shall be the date of the Survivor Recipient’s death. The valuation date is the first
day of each taxable year of the trust. If, for any year, thenet fair market value of the trust assets is incorrectly
determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to
the Predeceasing Recipient and/or theSurvivor Recipient (in the case of an undervaluation) or receive from the
Predeceasing Recipient and/or the Survivor Recipient (inthe case of an overvaluation) an amount equal to the
difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6(i). In such a year,
this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of
paragraph 2(i) or in (a) of paragraph 6(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 6(ii).
(iii)Proration of unitrust amount between Predeceasing Recipient andSurvivor Recipient. Upon the death of the Pre-
deceasing Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death
of the Predeceasing Recipient between the estate of the Predeceasing Recipient andthe Survivor Recipient.
(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 6(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
2005–34 I.R.B.380August 22, 2005

as of the valuation date. Beginning on the effective date of the triggering event, the trustee shall no longer pay the
amount equal to the lesser of (a) or (b) in paragraph 6(i).
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 2, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the
unitrust period, the Trustee shall pay to [permissible recipient]andto[permissible recipient] (hereinafter “the
Recipients”) in equal shares during their joint lives, a unitrust amount equal to the lesser of (a) a fixed percentage
amount equal to [a number no less than 5 and no more than 50] percent of the net fair market value of the assets
of the trust valued as of the valuation date (hereinafter “the fixed percentage amount described in (a) of paragraph
2(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
The unitrust amount for a taxable year shall also includeany amount of trust income for the year that is in excess
of [the fixed percentage amount determined under (a) of paragraph 2(i) for the year], but only to the extent that
the aggregate of the amounts paid to the Recipients in prior years was less than the aggregate of the amounts
determined for all prior years under (a) of paragraph 2(i) and (a) of paragraph 6(i). Upon the death of one of the
Recipients (herein “the Predeceasing Recipient”), the Trustee shall pay the entire unitrust amount to the survivor
(herein “the Survivor Recipient”). The unitrust amount shall be paid in equal quarterly installments at the end of
each calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount
shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 2(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable
year of the trust during the unitrust period, the Trustee shall pay to the Recipients in equal shares during their joint
lives a unitrust amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the net fair market
value of the trust assets as of the valuation date and,upon the death of the Predeceasing Recipient, the Trustee
shall pay the entire unitrust amount to the Survivor Recipient. Beginning on the effective date of the triggering
event, the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in paragraph 2(i), and shall not
pay any amount of trust income described in the second sentence of paragraph 2(i). The unitrust amount shall be
paid in equal quarterly installments at the end of each calendar quarter from income and, to the extent income is
not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(iii)In general. The first day of the unitrust period shall be the date property is first transferred to the trust and the
last day of the unitrust period shall be the date of the Survivor Recipient’s death. The valuation date is the first
day of each taxable year of the trust. If, for any year, thenet fair market value of the trust assets is incorrectly
determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to
the Predeceasing Recipient and/or theSurvivor Recipient (in the case of an undervaluation) or receive from the
Predeceasing Recipient and/or the Survivor Recipient (inthe case of an overvaluation) an amount equal to the
difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 4, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 2(i) or, if an additional
contribution is made to the trust, the fixed percentage amount described in (a) of paragraph 6(i). In such a year,
this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of
paragraph 2(i) or in (a) of paragraph 6(i) to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 2(ii) or, if anadditional contribution is
made to the trust, the unitrust amount described in paragraph 6(ii).
(iii)Proration of unitrust amount between Predeceasing Recipient andSurvivor Recipient. Upon the death of the Pre-
deceasing Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death
of the Predeceasing Recipient between the estate of the Predeceasing Recipient andthe Survivor Recipient.
August 22, 20053812005–34 I.R.B.

(d)Replace paragraph 6, Additional Contributions, of the sample trust with the following paragraph:
Additional Contributions.
(i)Additional contributions made before effective date of triggering event. Notwithstanding paragraph 2(i), if any
additional contributions are made to the trust after the initial contribution and before the effective date of the trig-
gering event, the unitrust amount for the year in which the additional contribution is made shall be equal to the
lesser of:
(a)a fixed percentage amount equal to [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(1)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(2)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation
date) multiplied by a fraction the numerator of which is the number of days in the period that begins with
the date of contribution and ends with the earlier ofthe last day of the taxable year or the last day of the
unitrust period and the denominator of which is the number of days in the period that begins with the first
day of such taxable year and ends with the earlier of thelast day in such taxable year or the last day of the
unitrust period
(hereinafter “the fixed percentage amountdescribed in (a) of paragraph 6(i)”); or
(b)the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations.
The unitrust amount for that year shall also include any amount of trust income for the year that is in excess of
[the fixed percentage amount determined under (a) of paragraph 6(i) for the year], but only to the extent that
the aggregate of the amounts paid to the Recipients in prior years was less than the aggregate of the amounts
determined for all prior years under (a) of paragraph 2(i) and (a) of paragraph 6(i). In a taxable year in which an
additional contribution is made on or after the valuation date, the assets so added shall be valued as of the date of
contribution, without regard to any post-contribution income or appreciation, rather than as of the valuation date.
(ii)Additional contributions made on or after effective date of triggering event. Notwithstanding paragraph 2(ii), if any
additional contributions are made to the trust after the initial contribution and on or after the effective date of the
triggering event, the unitrust amount described in paragraph 2(ii) for the year in which the additional contribution
is made shall be [same percentage used in (a) of paragraph 2(i)] percent of the sum of:
(a)the net fair market value of the trust assets as of the valuation date (excluding the assets so added and any
post-contribution income from, and appreciation on, such assets during that year); and
(b)for each additional contribution during the year, the fairmarket value of the assets so added as of the valuation
date (including any post-contribution income from, and appreciation on, such assets through the valuation date)
multiplied by a fraction the numerator of which is the number of days in the period that begins with the date
of contribution and ends with the earlier of the last day ofthe taxable year or the last day of the unitrust period
and the denominator of which is the number of days in theperiod that begins with the first day of such taxable
year and ends with the earlier of the last day in such taxable year or the last day of the unitrust period.
In a taxable year in which an additional contribution is made on or after the valuation date, the assets so added shall
be valued as of the date of contribution, without regard to any post-contribution incomeor appreciation, rather than
as of the valuation date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay
the amount equal to the lesser of (a) or (b) in paragraph 6(i) and shall not pay any amount of income described in
the second sentence of paragraph 6(i).
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES
Section 5 of Rev. Proc. 90–30 and section 6of Rev. Proc. 90–31 are superseded.
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
2005–34 I.R.B.382August 22, 2005

26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2.)
Rev. Proc. 2005–56
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for a testamentary charitable remainder unitrust (CRUT) providing for unitrust
payments for one measuring life followed by the distribution of trust assets to a charitable remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Service issued sample trust instruments for certain types of CRUTs. The Service is updating the
previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions are
included as further guidance. In addition to the sample trust instrument included in this revenue procedure for a testamentary CRUT
providing for unitrust payments for one measuring life, samples are provided in other separate revenue procedures for:
(a)an inter vivos CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc. 2005–52), superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(c)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31);
(d)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30 and section 6 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57);
(f)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc. 90–30 and section 8 of Rev. Proc. 90–31); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for a testamentary CRUT with one measuring life that
is created by an individual who is a citizen or resident of the United States. Section 5 of this revenue procedure provides annotations
to the provisions of the sample trust. Section 6 of this revenue procedure provides samples of certain alternate provisions concerning:
(.01) the payment of part of the unitrust amount to an organization described in § 170(c); (.02) a qualified contingency; (.03) the
last unitrust payment to the recipient; (.04) a power of appointmentto designate the charitable remainderman; (.05) the net income
method of calculating the unitrust amount; (.06) the net income with make-up method of calculating the unitrust amount; and (.07) a
combination of methods for calculating the unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be deductible
by a citizen or resident of the United States under § 2055(e)(2)(A) for estate tax purposes if the other requirements of § 2055(e)(2)(A)
(that is, the requirements not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust
as a qualified CRUT meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner
consistent with the terms of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is
substantially similar to the sample in section 4 of this revenue procedure; or (ii) properly integrates one or more alternate provisions
from section 6 of this revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure.
A trust that contains substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly
integrated alternate provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under appli-
cable local law that are not inconsistent with the applicable federal tax requirements), orthat omits any of the provisions of section
4 of this revenue procedure (unless an alternate provision from section 6 of this revenue procedure is properly integrated), will not
necessarily be disqualified, but neither will that trust be assured of qualification under the provisions of this revenue procedure. The
Service generally will not issue a letter ruling on whether a testamentary trust created by an individual providing for unitrust payments
for one measuring life qualifies as a CRUT. The Service, however, generally will issue letter rulings on the effect of substantive trust
provisions, other than those contained in sections 4 and 6 of this revenue procedure, on the qualification of a trust as a CRUT.
August 22, 20053832005–34 I.R.B.

SECTION 4. SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST — ONE LIFE
I give, devise, and bequeath [property bequeathed] to my Trustee in trust to be administered under this provision. I intend this
bequest to establish a charitable remainder unitrust, within the meaning of Rev. Proc. 2005–56 and § 664(d)(2) of the Internal Rev-
enue Code (hereinafter “the Code”). The trust shall be known as the
Charitable Remainder Unitrust and I hereby
designate
as the initial trustee (hereinafter “the Trustee”).
1.PaymentofUnitrustAmount.In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible
recipient] (hereinafter “the Recipient”) a unitrust amount equal to [a number no less than 5 and no more than 50] percent of the net fair
market value of the assets of the trust valued as of the first day ofeach taxable year of the trust (hereinafter “the valuation date”). The
first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient’s
death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income and, to the
extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be
added to principal. If, for any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable
period after the correct value is finally determined, the Trustee shall pay to the Recipient (in the case of an undervaluation) or receive
from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable
and the unitrust amount(s) actually paid.
2.Deferral Provision. The obligation to pay the unitrust amount shall commence with the date of my death, but payment of the
unitrust amount may be deferred from this date until the end of the taxable year in which the trust is completely funded. Within a
reasonable time after the end of the taxable year in which the trust is completely funded, the Trustee must pay to the Recipient (in the
case of an underpayment) or receive from the Recipient (in the case of an overpayment) the difference between any unitrust amounts
actually paid, plus interest, and the unitrust amounts payable, plus interest. The interest shall be computed for any period at the rate
of interest, compounded annually, that the federal income tax regulations under § 664 of the Code prescribe for this computation.
3.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1.
4.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Recipient under the terms of this trust) to [designated remainderman] (hereinafter “the
Charitable Organization”). If the Charitable Organization is not an organization described in §§ 170(c) and 2055(a) of the Code at the
time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the then principal and income
to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the proportions as the
Trustee shall decide, in the Trustee’s sole discretion.
5.Additional Contributions. No additional contributions shall be made to the trust after the initial contribution. The initial contri-
bution, however, shall be deemed to consist of all property passing to the trust by reason of my death.
6.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
7.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
8.Taxable Year. The taxable year of the trustshall be the calendar year.
9.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the Trustee
is prohibited from exercising any power or discretion granted undersaid laws that would be inconsistent with the qualification of the
trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
10.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
11.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
12.Definition of Recipient. References to the Recipient in this trust instrumentshall be deemed to include the estate of the Recipient
with regard to all provisions in this trust instrument that describe amounts payable to and/or due from the Recipient. The prior sentence
shall not apply to the determination of the last day of the unitrust period.
2005–34 I.R.B.384August 22, 2005

SECTION 5. ANNOTATIONS REGARDING SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — ONE LIFE
.01Annotations for Introductory Paragraph of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 2055 for property contributed to the trust.
Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition of, and function exclusively
as, a charitable remainder trust from the creation of the trust.Section 1.664–1(a)(4). Solely for purposes of § 664, a trust
is deemed created at the earliest time that no person is treated as the owner of the entire trust under subpart E, part 1,
subchapter J, chapter 1, subtitle A of the Code (subpart E). For purposes of § 2055, a charitable remainder trust shall be
deemed created at the date of death of the decedent (even though the trust is not funded until the end of a reasonable period
of administration or settlement) if the obligation to pay theunitrust amount with respect to the property passing in trust at
the death of the decedent begins as of the date of death of the decedent, even though the requirement to pay this amount is
deferred in accordance with § 1.664–1(a)(5)(i). In addition, funding the trust with certain types of assets may disqualify a
charitable remainder trust. See § 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.06 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating tothe trustee’s duties and powers, as long as the provisions do
not conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder.
.02Annotations for Paragraph 1, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible recipients. For a CRUT with a unitrust period based on the life of one individual, the unitrust amount must
generally be paid to that individual and the individual must be living at the time of the creation of the trust. See Rev. Rul.
2002–20, 2002–1 C.B. 794, for situations in which the unitrust amount may be paid to a trust for the benefit of an individual
who is financially disabled. An organization described in § 170(c) may receive part, but not all, of the unitrust amount.
Section 664(d)(2)(A) and § 1.664–3(a)(3)(i). See section 6.01 of this revenue procedure foran alternate provision that
provides for payment of part of the unitrust amount to an organization described in § 170(c).
(2)Fixed percentage method. Paragraph 1, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.05 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.06 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.07 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(3)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(4)Payment of unitrust amount in installments. Paragraph 1, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to the recipient annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(5)Rules applicable to valuation. Paragraph 1, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if the valuation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
August 22, 20053852005–34 I.R.B.

payment of the unitrust amount; and (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period. See § 1.664–3(a)(1)(v).
(6)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.03(1) of this revenue procedure for additional
information regarding the deferral of the payment of the unitrust amount until the end of the taxable year in which the trust
is completely funded.
(7)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(8)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c).If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotations for Paragraph 2, Deferral Provision, of the Sample Trust.
(1)Deferral of requirement to pay unitrust amount. The deferral provision in paragraph 2 of the sample trust authorizes defer-
ring the payment of the unitrust amount until the end of the taxable year of the trust in which the trust is completely funded.
Section 1.664–1(a)(5)(i) provides the operational rule for deferring payment of the unitrust amount in this circumstance.
The deferral provision in paragraph 2 ofthe sample trust uses the method for computing deferred payments that is provided
in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii) provides an alternate method for determining the amount described in
§ 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts payable plus interest on those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123,
provides sample language to be included in the governing instrument if the alternate method set forth in § 1.664–1(a)(5)(ii)
for determining the amount described in § 1.664–1(a)(5)(i)(b) is selected.
(2)Treatment of distributions. For the proper treatment of distributions to a charitable remainder trust or to the recipient
during the period of administration of an estate or settlement of a trust that is not a charitable remainder trust, see
§ 1.664–1(a)(5)(iii).
.04Annotations for Paragraph 3, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
(2)Determining unitrust amount payable in year of recipient’s death. Paragraph 3, Proration of Unitrust Amount, of the sample
trust specifies that the unitrustamountshallbeproratedonadailybasis.Seesection 6.03 of this revenue procedure for an
alternate provision that provides for the termination of thepayment of the unitrust amount with the last regular payment
preceding the recipient’s death.
.05Annotations for Paragraph 4, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(3) of this revenue procedure, the value of the charitable remainder
interest (determined under § 7520) is required to be at least 10 percent of the net fair market value of the property contributed
to the trust as finally determined for federalestate tax purposes. Section 664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in §§ 170(c) and
2055(a) at the time of the transfer to the CRUT. See § 664(d)(2)(C). The trust instrument may restrict the charitable re-
mainderman to an organization described in §§ 170(c) and 2055(a), but grant to a trustee or other person the power to
designate the actual charitable remainderman. See section 6.04 of this revenue procedure for an alternate provision in
which the recipient is granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
2005–34 I.R.B.386August 22, 2005

remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.07(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.06Annotations for Paragraph 6, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7
)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an indep
endent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarket
able asset that is valued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a qual
ified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser whi
le others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the tru
st to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuati
on of unmarketable assets.
.07Annotations for Paragraph 7, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipient is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and an estate tax charitable deduction
is sought for the organization’s interest in the unitrust amount. See § 4947(b)(3). See section 6.01 of this revenue procedure
for an alternate provision that provides for payment of part of the unitrust amount to an organization described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as mod-
ified by § 4947(a)(1). Except as provided in paragraph 7 of the sample trust, the trust instrument may limit the application
of the provisions of § 508(e) to the period after the termination of the unitrust period when the trust continues in existence
for the benefit of the charitable remainderman.
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — ONE LIFE
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation.An organization described in § 170(c) may receive part, but not all, of any unitrust amount. Section
664(d)(2)(A). If an estate tax charitable deduction is sought for the present value of the unitrust interest passing to a
charitable organization, the trust instrument must contain additional provisions. First, the trust instrument must specify the
portion of each unitrust payment that is payable to the noncharitable recipient and tothe charitable organization described
in §§ 170(c) and 2055(a). Second, the trust instrument must contain a means for selecting an alternative qualified charitable
organization if the designated organization is not a qualified organization at the time when any unitrust amount is to be
paid to it. Third, the trust instrument must contain prohibitions against investments that jeopardize the exempt purpose of
the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any excess business holdings
within the meaning of § 4943, as modified by § 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount.The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient]percentoftheunitrustamountto[permissible recipient]
August 22, 20053872005–34 I.R.B.

(hereinafter “the Recipient”) and [the percentage of the unitrust amount payable to the charitable recipient] percent of
the unitrust amount to [an organization described in §§ 170(c) and 2055(a) of the Code] (hereinafter “the Charitable
Recipient”). The first day of the unitrust period shall bethe date of my death and the last day of the unitrust period
shall be the date of the Recipient’s death. If the Charitable Recipient is not an organization described in §§ 170(c) and
2055(a) of the Code at the time when any unitrust payment isto be distributed to it, then the Trustee shall distribute
that unitrust payment to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee
shall select, and in the proportions as the Trustee shall decide, in the Trustee’s sole discretion. The unitrust amount
shall be paid in equal quarterly installments at the end ofeach calendar quarter from income and, to the extent income
is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall
be added to principal. If, for any year, the net fair market value of the trust assets is incorrectly determined, then
within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient and the
Charitable Recipient (in the case of an undervaluation) orreceive from the Recipient andthe Charitable Recipient (in
the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and
the unitrust amount(s) actually paid.
(b)Replace each reference to “the Recipient” in paragraph 2, Deferral Provision, of the sample trust with a reference to “the
Recipient and the Charitable Recipient.”
(c)Replace the first parenthetical in paragraph 4, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the Recipient and the Charitable Recipient under the terms of this trust)
(d)Add the following sentence after the first and only sentence in paragraph 7, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Qualified Contingency.
(1)Explanation.Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency (as defined in § 664(f)(3)) or the death of the recipient. The amount of the charitable deduction, however, will
be determined without regard to a qualified contingency. See § 664(f)(2).
(2)Instructions for use.Replace the second sentence of paragraph 1, Payment of Unitrust Amount, of the sample trust with
the following sentence:
The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date
of the Recipient’s death or, if earlier, the date on which occurs the [qualified contingency].
.03Last Unitrust Payment to the Recipient.
(1)Explanation.As an alternative to prorating the unitrust amount in the taxable year of the recipient’s death, the obligation
to pay the unitrust amount may terminate with the last regular payment preceding the recipient’s death. However, the fact
that the recipient may not receive a finalprorated payment shall not be taken into account for purposes of determining
the present value of the remainder interest. Section 1.664–3(a)(5)(i). Note that although the obligation to pay the unitrust
amount may terminate with the last regularpayment preceding the recipient’s death,the trustee must pay to the recipient’s
estate any amounts allocated to the payments payable beforethe recipient’s death that are due as a result of an adjustment
to the unitrust amount payable for that year, as in the case of an undervaluation.
(2)Instructions for use.Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 1. In the taxable year of the trust during which the unitrust period ends, however, the obligation
of the Trustee to pay the unitrust amount shall terminate with the last regular quarterly installment preceding the death
of the Recipient.
.04Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation.The trust instrument may grant the recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use.Replace paragraph 4, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and
income of the trust (other than any amount due the Recipient under the terms of this trust) to one or more charitable orga-
nizations described in §§ 170(c) and 2055(a) of the Code as theRecipient shall appoint and direct by specific reference
to this power of appointment by inter vivos or testamentary instrument. To the extent the Recipient fails to effectively
exercise the power of appointment, the principal and income not effectively appointed shall be distributed to one or more
organizations described in §§ 170(c) and 2055(a) of the Codeas the Trustee shall select, and in the proportions as the
2005–34 I.R.B.388August 22, 2005

Trustee shall decide, in the Trustee’s sole discretion. If an organization fails toqualify as an organization described in
§§ 170(c) and 2055(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the
Trustee shall distribute the then principal and income to one or more organizations described in §§ 170(c) and 2055(a)
of the Code as the Trustee shall select, andin the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
.05Net Income Method of Calculating the Unitrust Amount.
(1)Explanation.As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 1 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number no less than
5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation date
(hereinafter “the fixed percentage amount described in (a)of paragraph 1”) or (b) the trust income for the taxable year
as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day of each taxable
year of the trust. The first day of the unitrust period shall be the date of my death and the last day of the unitrust
period shall be the date of the Recipient’s death. The unitrust amount shall be paid in equal quarterly installments
at the end of each calendar quarter from income. Any incomeof the trust for a taxable year in excess of the unitrust
amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 1 to determine the unitrust amount payable for that year.
.06Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation.As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 1 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.05 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipient in prior years was less than the amounts that would have been paid to the recipient if the unitrust amount
had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.05(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
August 22, 20053892005–34 I.R.B.

(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number no less than
5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation date
(hereinafter “the fixed percentage amount described in (a)of paragraph 1”) or (b) the trust income for the taxable year
as defined in § 643(b) of the Code and the applicable regulations. The unitrust amount for a taxable year shall also
include any amount of trust income for the year that is in excess of [the fixed percentage amount determined under
(a) of this paragraph for the year], but only to the extent that the aggregate of the amounts paid to the Recipient in
prior years was less than the aggregate of the amounts determined for all prior years under (a) of this paragraph. The
valuation date is the first day of each taxable year of the trust. The first day of the unitrust period shall be the date of
my death and the last day of the unitrust period shall be the date of the Recipient’s death. The unitrust amount shall
be paid in equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for
a taxable year in excess of the unitrustamount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 1 to determine the unitrust amount payable for that year.
.07Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation.The net income method (described in section 6.05 of this revenue procedure) or the net income with make-up
method (described in section 6.06 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method
of calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and
(d)), for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time con-
version from the net income or the net income with make-upmethod to the fixed percentage method of calculation, the
governing instrument must provide that: (i) the change in method is triggered on a specific date or by a single event whose
occurrence is not discretionary with, or within the control of, the trustees or any other persons; (ii) the change in method
occurs at the beginning of the taxable yearthat immediately follows the taxable yearduring which the permissible triggering
event occurs; and (iii) following the trust’s conversion to thefixed percentage method, the trust will pay at least annually
to the recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described in § 1.664–3(a)(1)(i)(b). Section
1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2) that is not paid by the beginning of the
taxable year immediately following the taxable year during which the permissible triggering event occurs shall be forfeited
by the recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period,
the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount equal to the lesser
of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net fair
market value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 1(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code
and the applicable regulations. The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the
Recipient in each remaining taxable year of the trust during the unitrust period a unitrust amount equal to [same
percentage used in (a) of paragraph 1(i)] percent of the net fair market value of the trust assets as of the valuation
2005–34 I.R.B.390August 22, 2005

date. Beginning on the effective date of the triggering event, the Trustee shall no longer pay the amount equal to
the lesser of (a) or (b) in paragraph 1(i). The unitrust amount shall be paid in equal quarterly installments at the
end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income
of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general.The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the date of the Recipient’s death. The valuation date is the first day of each taxable year of the trust. If, for
any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after
the correct value is finally determined, the Trustee shallpay to the Recipient (in the case of an undervaluation) or
receive from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust
amount(s) properly payable and theunitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of paragraph 1(i)
to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the
unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount
equal to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent
of the net fair market value of the assets of the trust valuedas of the valuation date (hereinafter “the fixed percentage
amount described in (a) of paragraph 1(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of
the Code and the applicable regulations. The unitrust amount for a taxable year shall also include any amount of
trust income for the year that is in excess of [the fixed percentage amount determined under (a) of paragraph 1(i)
for the year], but only to the extent that the aggregate of the amounts paid to the Recipient in prior years was less
than the aggregate of the amounts determined for all prioryears under (a) of paragraph 1(i). The unitrust amount
shall be paid in equal quarterly installments at the endof each calendar quarter from income. Any income of the
trust for a taxable year in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Reg-
ulations] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately
follows the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the
Recipient in each remaining taxable year of the trust during the unitrust period a unitrust amount equal to [same
percentage used in (a) of paragraph 1(i)] percent of the net fair market value of the trust assets as of the valuation
date. Beginning on the effective date of the triggeringevent, the Trustee shall no longer pay the amount equal
to the lesser of (a) or (b) in paragraph 1(i) and shall notpay any amount of trust income described in the second
sentence of paragraph 1(i). The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust
for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general.The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the date of the Recipient’s death. The valuation date is the first day of each taxable year of the trust. If, for
any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after
the correct value is finally determined, the Trustee shallpay to the Recipient (in the case of an undervaluation) or
receive from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust
amount(s) properly payable and theunitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
August 22, 20053912005–34 I.R.B.

(i)Proration in years preceding the effective date of triggering event.For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of paragraph 1(i)
to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES
Section 6 of Rev. Proc. 90–30 and section 7of Rev. Proc. 90–31 are superseded.
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2.)
Rev. Proc. 2005–57
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for a testamentary charitable remainder unitrust (CRUT) providing for unitrust
payments for a term of years followed by the distribution of trust assets to a charitable remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Service issued sample trust instruments for certain types of CRUTs. The Service is updating the
previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions are
included as further guidance. In addition to the sample trust instrument included in this revenue procedure for a testamentary CRUT
providing for unitrust payments for a term of years, samples are provided in separate revenue procedures for:
(a)an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005–52, superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(c)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31);
(d)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30 and section 6 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(f)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc. 90–30 and section 8 of Rev. Proc. 90–31); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for a testamentary CRUT that is created by an individual
who is a citizen or resident of the United States and that providesfor a term of years unitrust period. Section 5 of this revenue
procedure provides annotations to the provisions of the sample trust. Section 6 of this revenue procedure provides samples of certain
alternate provisions concerning: (.01) the payment of part of the unitrust amount to an organization described in § 170(c); (.02) the
apportionment of the unitrust amount among members of a named classin the discretion of the trustee; (.03) a qualified contingency;
(.04) a power of appointment to designate the charitable remainderman; (.05) the net income method of calculating the unitrust amount;
2005–34 I.R.B.392August 22, 2005

(.06) the net income with make-up method of calculating the unitrust amount; and (.07) a combination of methods for calculating the
unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be deductible
by a citizen or resident of the United States under § 2055(e)(2)(A) for estate tax purposes if the other requirements of § 2055(e)(2)(A)
(that is, the requirements not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust
as a qualified CRUT meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner
consistent with the terms of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is
substantially similar to the sample in section 4 of this revenue procedure; or (ii) properly integrates one or more alternate provisions
from section 6 of this revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure. A
trust that contains substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly inte-
grated alternate provisions from section 6 of this revenue procedure, or provisions necessary to establish a valid trust under applicable
local law that are not inconsistent with the applicable federal tax requirements), or that omits any of the provisions of section 4 of this
revenue procedure (unless an alternate provision from section 6 of this revenue procedure is properly integrated), will not necessarily
be disqualified, but neither will that trust be assured of qualification under the provisions of this revenue procedure. The Service
generally will not issue a letter ruling on whether a testamentary trust created by an individual andhaving a term of years unitrust
period qualifies as a CRUT. The Service, however, generally will issue letter rulings on the effect of substantive trust provisions, other
than those contained in sections 4 and 6 of this revenueprocedure, on the qualification of a trust as a CRUT.
SECTION 4. SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST — TERM OF YEARS
I give, devise, and bequeath [property bequeathed] to my Trustee in trust to be administered under this provision. I intend this
bequest to establish a charitable remainder unitrust, within the meaning of Rev. Proc. 2005–57 and § 664(d)(2) of the Internal Revenue
Code (hereinafter “the Code”). The trust shall be known as the
Charitable Remainder Unitrust and I hereby designate
as the initial trustee (hereinafter “the Trustee”).
1.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient] (hereinafter “the Recipient”) a unitrust amount equal to [a number no less than 5 and no more than 50] percent of the net
fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter “the valuation date”).
The unitrust period shall be a period of [a number not more than 20] years. The first day of the unitrust period shall be the date of my
death and the last day of the unitrust period shall be the day preceding the [ordinal number corresponding to the length of the unitrust
period] anniversary of that date. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter
from income and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the
unitrust amount shall be added to principal. If, for any year, the net fair market value of the trust assets is incorrectly determined,
then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in the case of an
undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust
amount(s) properly payable and the unitrust amount(s) actually paid.
2.Deferral Provision. The obligation to pay the unitrust amount shall commence with the date of my death, but payment of the
unitrust amount may be deferred from this date until the end of the taxable year in which the trust is completely funded. Within a
reasonable time after the end of the taxable year in which the trust is completely funded, the Trustee must pay to the Recipient (in the
case of an underpayment) or receive from the Recipient (in the case of an overpayment) the difference between any unitrust amounts
actually paid, plus interest, and the unitrust amounts payable, plus interest. The interest shall be computed for any period at the rate
of interest, compounded annually, that the federal income tax regulations under § 664 of the Code prescribe for this computation.
3.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1.
4.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Recipient under the terms of this trust) to [designated remainderman] (hereinafter “the
Charitable Organization”). If the Charitable Organization is not an organization described in §§ 170(c) and 2055(a) of the Code at the
time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the then principal and income
to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the proportions as the
Trustee shall decide, in the Trustee’s sole discretion.
5.Additional Contributions. No additional contributions shall be made to the trust after the initial contribution. The initial contri-
bution, however, shall be deemed to consist of all property passing to the trust by reason of my death.
6.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
August 22, 20053932005–34 I.R.B.

7.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
8.Taxable Year. The taxable year of the trustshall be the calendar year.
9.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the Trustee is
prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification of the
trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
10.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
11.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
12.Definition of Recipient. References to the Recipient in this trust instrumentshall be deemed to include the estate of the Recipient
with regard to all provisions in this trust instrument that describe amounts payable to and/or due from the Recipient. The prior sentence
shall not apply to the determination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — TERM OF YEARS
.01Annotations for Introductory Paragraph of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 2055 for property contributed to the trust.
Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition of and function exclusively
as a charitable remainder trust from the creation of the trust. Section 1.664–1(a)(4). Solely for purposes of § 664, a trust
is deemed created at the earliest time that no person is treated as the owner of the entire trust under subpart E, part 1,
subchapter J, chapter 1, subtitle A of the Code (subpart E). For purposes of § 2055, a charitable remainder trust shall be
deemed created at the date of death of the decedent (even though the trust is not funded until the end of a reasonable period
of administration or settlement) if the obligation to pay theunitrust amount with respect to the property passing in trust at
the death of the decedent begins as of the date of death of the decedent, even though the requirement to pay this amount is
deferred in accordance with § 1.664–1(a)(5)(i). In addition, funding the trust with certain types of assets may disqualify a
charitable remainder trust. See § 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.06 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating to the trustee’s duties and powers, as long as the provisions do not
conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder. Note that certain
powers given to certain persons serving as the trustee maycause the trustee to be treated asthe owner of the trust under
subpart E and thus disqualify the trust as a charitable remainder trust. See § 1.664–1(a)(4).
.02Annotations for Paragraph 1, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible term. The period for which the unitrust amount is payable must not exceed 20 years. Section 1.664–3(a)(5).
Thus, for example, the unitrust period of a CRUT for a termof 20 years will end on the day preceding the twentieth an-
niversary of the date the trust was created.
(2)Permissible recipients. For a CRUT having a term of years unitrust period, the unitrust amount must generally be paid to
a named person or persons (within the meaning of § 7701(a)(1)). If the unitrust amount is to be paid to an individual or
individuals, all the individuals must be living at the time of the creation of the trust. The unitrust amount may be payable to
the estate or heirs of a named recipient who dies prior to the expiration of the term of years. See Rev. Rul. 74–39, 1974–1
C.B. 156. The unitrust amount may be payable to members of a named class and, because the unitrust period is for a term
of years, all of the members of the class need not be living or ascertainable at the creation of the trust. An organization
described in § 170(c) may receive part, but not all, of the unitrust amount. Section664(d)(2)(A) and § 1.664–3(a)(3)(i). See
section 6.01 of this revenue procedure for an alternate provision that provides for payment of part of the unitrust amount to
an organization described in § 170(c).
2005–34 I.R.B.394August 22, 2005

(3)Multiple noncharitable recipients. Generally, if the unitrust amount is payableto more than one person, the trust instrument
should describe the interest of each person. See section 6.02 of this revenue procedure for an alternate provision providing
for the apportionment of the unitrust amount among members of a named class in the discretion of the trustee.
(4)Fixed percentage method. Paragraph 1, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.05 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.06 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.07 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(5)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(6)Payment of unitrust amount in installments. Paragraph 1, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to the recipient annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(7)Rules applicable to valuation. Paragraph 1, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if the valuation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; and (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period. See § 1.664–3(a)(1)(v).
(8)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.03(1) of this revenue procedure for additional
information regarding the deferral of the payment of the unitrust amount until the end of the taxable year in which the trust
is completely funded.
(9)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(10)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c). If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotations for Paragraph 2, Deferral Provision, of the Sample Trust.
(1)Deferral of requirement to pay unitrust amount. The deferral provision in paragraph 2 of the sample trust authorizes defer-
ring the payment of the unitrust amount until the end of the taxable year of the trust in which the trust is completely funded.
Section 1.664–1(a)(5)(i) provides the operational rule for deferring payment of the unitrust amount in this circumstance.
The deferral provision in paragraph 2 ofthe sample trust uses the method for computing deferred payments that is provided
in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii) provides an alternate method for determining the amount described in
§ 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts payable plus interest on those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123,
provides sample language to be included in the governing instrument if the alternate method set forth in § 1.664–1(a)(5)(ii)
for determining the amount described in § 1.664–1(a)(5)(i)(b) is selected.
(2)Treatment of distributions. For the proper treatment of distributions to a charitable remainder trust or to the recipient
during the period of administration of an estate or settlement of a trust that is not a charitable remainder trust, see
§ 1.664–1(a)(5)(iii).
August 22, 20053952005–34 I.R.B.

.04Annotations for Paragraph 3, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
.05Annotations for Paragraph 4, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(5) of this revenue procedure the value of the charitable remainder
interest (determined under § 7520) is required to be at least 10 percent of the net fair market value of the property con-
tributed to the trust as of the date of its contribution to the trust as finally determined for federal estate tax purposes. Section
664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in §§ 170(c) and
2055(a) at the time of the transfer to the CRUT. See § 664(d)(2)(C). The trust instrument may restrict the charitable re-
mainderman to an organization described in §§ 170(c) and 2055(a), but grant to a trustee or other person the power to
designate the actual charitable remainderman. See section 6.04 of this revenue procedure for an alternate provision in
which the recipient is granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.07(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.06Annotations for Paragraph 6, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an independent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarketable asset that is valued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a qualified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser while others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the trust to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuation of unmarketable assets.
.07Annotations for Paragraph 7, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipient is not considered an act of self dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and an estate tax charitable deduction
is sought for the organization’s interest in the unitrust amount. See § 4947(b)(3). See section 6.01 of this revenue procedure
for an alternate provision that provides for payment of part of the unitrust amount to an organization described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as mod-
ified by § 4947(a)(1). Except as provided in paragraph 7 of the sample trust, the trust instrument may limit the application
2005–34 I.R.B.396August 22, 2005

of the provisions of § 508(e) to the period after the termination of the unitrust period when the trust continues in existence
for the benefit of the charitable remainderman.
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — TERM OF YEARS
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If an estate tax charitable deduction is sought for the present value of the unitrust interest passing to a
charitable organization, the trust instrument must contain additional provisions. First, the trust instrument must specify the
portion of each unitrust payment that is payable to the noncharitable recipient and tothe charitable organization described
in §§ 170(c) and 2055(a). Second, the trust instrument must contain a means for selecting an alternative qualified charitable
organization if the designated organization is not a qualified organization at the time when any unitrust amount is to be
paid to it. Third, the trust instrument must contain prohibitions against investments that jeopardize the exempt purpose of
the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any excess business holdings
within the meaning of § 4943, as modified by § 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient]percentoftheunitrustamountto[permissible recipient]
(hereinafter “the Recipient”) and [the percentage of the unitrust amount payable to the charitable recipient] percent of
the unitrust amount to [an organization described in §§ 170(c) and 2055(a) of the Code] (hereinafter “the Charitable
Recipient”). The unitrust period shall be a period of [a number not more than 20 years] years. The first day of
the unitrust period shall be the date of my death and the last day of the unitrust period shall be the day preceding
the [ordinal number corresponding to the length of the unitrust period] anniversary of that date. If the Charitable
Recipient is not an organization described in §§ 170(c) and 2055(a) of the Code at the time when any unitrust payment
is to be distributed to it, then the Trustee shall distribute that unitrust payment to one or more organizations described
in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall decide,
in the Trustee’s sole discretion. The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust for a
taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market value of
the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined,
the Trustee shall pay to the Recipient and the Charitable Recipient (in the case of an undervaluation) or receive from
the Recipient and the Charitable Recipient (in the case of an overvaluation) an amount equal to the difference between
the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(b)Replace each reference to “the Recipient” in paragraph 2, Deferral Provision, of the sample trust with a reference to “the
Recipient and the Charitable Recipient.”
(c)Replace the first parenthetical in paragraph 4, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the Recipient and the Charitable Recipient under the terms of this trust)
(d)Add the following sentence after the first and only sentence in paragraph 7, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Apportionment of the Unitrust Amount Among Members of a Named Class in the Disc
retion of the
Trustee.
(1)Explanation. A trust is not a CRUT if any person has the power to alter the amount to be paid to any named person other
than an organization described in § 170(c) if the power wouldcause any person to be treated as the owner of the trust, or
any portion thereof, if subpart E were applicable to the trust. Section 1.664–3(a)(3)(ii). See Rev. Rul. 77–73, 1977–1 C.B.
175. A trustee’s discretionary power, exercisable solely by that trustee, to allocate the unitrust amount among the members
of a class would cause the trustee to be treated as the owner ofall or a portion of the trust under § 678(a) if the trustee is a
member of the class, if the trustee may apply trust income or corpus to satisfy the trustee’s own legal obligation, or if the
trustee actually exercises the power to satisfy a support obligation owed by the trustee. Therefore, if any trustee is given the
discretionary power exercisable solely by that trustee to allocate the unitrust amount among members of a class, the trust
August 22, 20053972005–34 I.R.B.

instrument must provide that such trustee must be: (i) not a member of the recipient class; and (ii) prohibited from applying
any part of the unitrust payment in satisfaction of the trustee’s own legal obligation.
(2)Instructions for use.
(a)Add the following sentence to the sample trust:
Any trustee who is authorized in the trustee’s sole discretion to allocate the unitrust amount among members of a
Recipient class must be independent within the meaning of § 674(c) of the Code and must not be a member of the
Recipient class.
(b)Replace the first sentence of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following three
sentences:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to a member or members of a class
of persons comprised of [designated members of class] (hereinafter collectively “the Recipient”) a unitrust amount
equal to [a number no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust
valued as of the first day of each taxable year of the trust (hereinafter “the valuation date”). The Trustee may pay
the unitrust amount to one or more members of the class, inequal or unequal shares, as the Trustee, in the Trustee’s
sole discretion, from time to time may deem advisable. The Trustee may not, however, apply any payment for the
Trustee’s own benefit, or in satisfaction of anysupport or other legal obligation of the Trustee.
.03Qualified Contingency.
(1)Explanation. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency (as defined in § 664(f)(3)) or the expiration of the term of years unitrust period. The amount of the charitable
deduction, however, will be determined without regard to a qualified contingency. See § 664(f)(2).
(2)Instructions for use. Replace the second and third sentences of paragraph 1, Payment of Unitrust Amount, of the sample
trust with the following two sentences:
The unitrust period is a period of [not more than 20] years, unless earlier terminated by the occurrence of [qualified
contingency]. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the day preceding the [ordinal number corresponding to the length of the unitrust period] anniversary of that
date or, if earlier, the date on which occurs the [qualified contingency].
.04Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant the recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 4, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and
income of the trust (other than any amount due the Recipient under the terms of this trust) to one or more charitable orga-
nizations described in §§ 170(c) and 2055(a) of the Code as theRecipient shall appoint and direct by specific reference
to this power of appointment by inter vivos or testamentary instrument. To the extent the Recipient fails to effectively
exercise the power of appointment, the principal and income not effectively appointed shall be distributed to one or more
organizations described in §§ 170(c) and 2055(a) of the Codeas the Trustee shall select, and in the proportions as the
Trustee shall decide, in the Trustee’s sole discretion. If an organization fails toqualify as an organization described in
§§ 170(c) and 2055(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the
Trustee shall distribute the then principal and income to one or more organizations described in §§ 170(c) and 2055(a)
of the Code as the Trustee shall select, andin the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
.05Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 1 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
2005–34 I.R.B.398August 22, 2005

must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first five sentences of paragraph 1, Payment ofUnitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number no less than
5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation date
(hereinafter “the fixed percentage amount described in (a)of paragraph 1”) or (b) the trust income for the taxable year
as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day of each taxable
year of the trust. The unitrust period shall be a period of [a number not more than 20 years] years. The first day
of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the day preceding
the [ordinal number corresponding to the length of the unitrust period] anniversary of that date. The unitrust amount
shall be paid in equal quarterly installments at the end ofeach calendar quarter from income. Any income of the trust
for a taxable year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 1 to determine the unitrust amount payable for that year.
.06Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 1 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.05 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipient in prior years was less than the amounts that would have been paid to the recipient if the unitrust amount
had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.05(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first five sentences of paragraph 1, Payment ofUnitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Recipient”) a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number no less than
5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation date
(hereinafter “the fixed percentage amount described in (a)of paragraph 1”) or (b) the trust income for the taxable year
as defined in § 643(b) of the Code and the applicable regulations. The unitrust amount for a taxable year shall also
include any amount of trust income for the year that is in excess of [the fixed percentage amount determined under
(a) of this paragraph for the year], but only to the extent that the aggregate of the amounts paid to the Recipient in
prior years was less than the aggregate of the amounts determined for all prior years under (a) of this paragraph. The
valuation date is the first day of each taxable year ofthe trust. The unitrust period shall be a period of [a number
not more than 20 years] years. The first day of the unitrust period shall be the date of my death and the last day of
the unitrust period shall be the day preceding the [ordinal number corresponding to the length of the unitrust period]
anniversary of that date. The unitrust amount shall be paidin equal quarterly installments at the end of each calendar
quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to
principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
August 22, 20053992005–34 I.R.B.

Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such a
year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a) of
paragraph 1 to determine the unitrust amount payable for that year.
.07Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.05 of this revenue procedure) or the net income with make-up
method (described in section 6.06 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method
of calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and
(d)), for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time con-
version from the net income or the net income with make-upmethod to the fixed percentage method of calculation, the
governing instrument must provide that: (i) the change in method is triggered on a specific date or by a single event whose
occurrence is not discretionary with, or within the control of, the trustees or any other persons; (ii) the change in method
occurs at the beginning of the taxable yearthat immediately follows the taxable yearduring which the permissible triggering
event occurs; and (iii) following the trust’s conversion to thefixed percentage method, the trust will pay at least annually
to the recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described in § 1.664–3(a)(1)(i)(b). Section
1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2) that is not paid by the beginning of the
taxable year immediately following the taxable year during which the permissible triggering event occurs shall be forfeited
by the recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period, the
Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount equal to the lesser of (a) a
fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net fair market value
of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount described in (a)
of paragraph 1(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from
income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Regula-
tions] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately follows
the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the Recipient in
each remaining taxable year of the trust duringthe unitrust period a unitrust amount equal to [same percentage used
in (a) of paragraph 1(i)] percent of the net fair market value of the trustassets as of the valuation date. Beginning on
the effective date of the triggering event, the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in
paragraph 1(i). The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter
from income and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in
excess of the unitrust amount shall be added to principal.
(iii)In general. The unitrust period shall be a period of [a number not more than 20] years. The first day of the unitrust
period shall be the date of my death and the last day ofthe unitrust period shall be the day preceding the [ordinal
number corresponding to the length of the unitrust period] anniversary of that date. The valuation date is the first day
of each taxable year of the trust. If, for any year, the net fair market value of the trust assetsis incorrectly determined,
then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in
the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the
difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
2005–34 I.R.B.400August 22, 2005

fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of paragraph 1(i)
to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the unitrust
period, the Trustee shall pay to [permissible recipient] (hereinafter “the Recipient”) a unitrust amount equal to the
lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net
fair market value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 1(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and
the applicable regulations. The unitrust amount for a taxable year shall also include any amount of trust income for
the year that is in excess of [the fixed percentage amount determined under (a) of paragraph 1(i) for the year], but
only to the extent that the aggregate of the amounts paid to the Recipient in prior years was less than the aggregate
of the amounts determined for all prior years under (a) of paragraph 1(i). The unitrustamount shall be paid in equal
quarterly installments at the end of each calendar quarterfrom income. Any income of the trust for a taxable year in
excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Regula-
tions] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately follows
the triggering event (hereinafter “the effective date of the triggering event”), the Trustee shall pay to the Recipient in
each remaining taxable year of the trust duringthe unitrust period a unitrust amount equal to [same percentage used
in (a) of paragraph 1(i)] percent of the net fair market value of the trustassets as of the valuation date. Beginning on
the effective date of the triggering event, the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in
paragraph 1(i) and shall not pay any amount of trust incomedescribed in the second sentence of paragraph 1(i). The
unitrust amount shall be paid in equal quarterly installments at the end of eachcalendar quarter from income and, to
the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust
amount shall be added to principal.
(iii)In general. The unitrust period shall be a period of [a number not more than 20] years. The first day of the unitrust
period shall be the date of my death and the last day ofthe unitrust period shall be the day preceding the [ordinal
number corresponding to the length of the unitrust period] anniversary of that date. The valuation date is the first day
of each taxable year of the trust. If, for any year, the net fair market value of the trust assetsis incorrectly determined,
then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in
the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the
difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixedpercentage amount described in (a) of paragraph 1(i) to
determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
August 22, 20054012005–34 I.R.B.

26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2.)
Rev. Proc. 2005–58
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for a testamentary charitable remainder unitrust (CRUT) providing for unitrust
payments payable consecutively for two measuring lives followed by the distribution of trust assetsto a charitable remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Serviceissued sample trust instruments for certain types of CRUTs. The Service is updating
the previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions
are included as further guidance. In addition to the sample trust instrument included in this revenue procedure for a testamentary
CRUT providing for unitrust payments payable consecutively for twomeasuring lives, samples are provided in other separate revenue
procedures for:
(a)an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005–52, superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(c)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31);
(d)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30 and section 6 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(f)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57); and
(g)a testamentary CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–59, superseding section 8 of Rev. Proc. 90–30 and section 9 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for a testamentary CRUT with consecutive interests for
two measuring lives that is created by an individual who is a citizen orresident of the United States. Section 5 of this revenue procedure
provides annotations to the provisions of the sample trust. Section 6 of this revenue procedure provides samples of certain alternate
provisions concerning: (.01) the payment of part of the unitrust amount to an organization described in § 170(c); (.02) a qualified
contingency; (.03) the last unitrust payments to the recipients; (.04) a power of appointment to designate the charitable remainderman;
(.05) the net income method of calculating the unitrust amount; (.06) the net income with make-up method of calculating the unitrust
amount; and (.07) a combination of methods for calculating the unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be deductible
by a citizen or resident of the United States under § 2055(e)(2)(A) for estate tax purposes if the other requirements of § 2055(e)(2)(A)
(that is, the requirements not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust
as a qualified CRUT meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner
consistent with the terms of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is
substantially similar to the sample in section 4 of this revenue procedure; or (ii) properly integrates one or more alternate provisions
from section 6 of this revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure.
A trust that contains substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly
integrated alternate provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under appli-
cable local law that are not inconsistent with the applicable federal tax requirements), orthat omits any of the provisions of section
4 of this revenue procedure (unless an alternate provision from section 6 of this revenue procedure is properly integrated), will not
necessarily be disqualified, but neither will that trust be assured of qualification under the provisions of this revenue procedure. The
Service generally will not issue a letter ruling on whether a testamentary trust created by an individualand with consecutive interests
for two measuring lives qualifies as a CRUT. The Service, however, generally will issue letter rulings on the effect of substantive trust
provisions, other than those contained in sections 4 and 6 of this revenue procedure, on the qualification of a trust as a CRUT.
2005–34 I.R.B.402August 22, 2005

SECTION 4. SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST — TWO LIVES,
CONSECUTIVE INTERESTS
I give, devise, and bequeath [property bequeathed] to my Trustee in trust to be administered under this provision. I intend this
bequest to establish a charitable remainder unitrust, within the meaning of Rev. Proc. 2005–58 and § 664(d)(2) of the Internal Revenue
Code (hereinafter “the Code”). The trust shall be known as the
Charitable Remainder Unitrust and I hereby designate
as the initial trustee (hereinafter “the Trustee”).
1.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient] (hereinafter “the Initial Recipient”) until the Initial Recipient’s death, and thereafter to [permissible recipient] (hereinafter
“the Successor Recipient”), a unitrust amount equal to [a number no less than 5 and no more than 50] percent of the net fair market
value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter“the valuation date”). The first
day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the death of the
survivor of the Initial Recipient and the Successor Recipient. The unitrust amount shall be paid in equal quarterly installments at the
end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust for a
taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market value of the trust assets is
incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Initial
Recipient and/or the Successor Recipient (inthe case of an undervaluation) or receive fromthe Initial Recipient and/or the Successor
Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the
unitrust amount(s) actually paid.
2.Deferral Provision. The obligation to pay the unitrust amount shall commence with the date of my death, but payment of the
unitrust amount may be deferred from this date until the end of the taxable year in which the trust is completely funded. Within a
reasonable time after the end of the taxable year in which the trust is completely funded, the Trustee must pay to the Initial Recipient
and/or the Successor Recipient (inthe case of an underpayment) or receive from the Initial Recipient and/or the Successor Recipient
(in the case of an overpayment) the difference between any unitrust amounts actually paid, plus interest, and the unitrust amounts
payable, plus interest. The interest shall be computed for any period at the rate of interest, compounded annually, that the federal
income tax regulations under § 664 of the Code prescribe for this computation.
3.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1. If the Successor Recipient survives the Initial Recipient,
the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death of the Initial Recipient between the
estate of the Initial Recipient and the Successor Recipient.
4.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Initial Recipient and/or the Successor Recipient under the terms of this trust) to [desig-
nated remainderman] (hereinafter “the Charitable Organization”). If the Charitable Organization is not an organization described in
§§ 170(c) and 2055(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall
distribute the then principal and income to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee
shall select, and in the proportionsas the Trustee shall decide, in the Trustee’s sole discretion.
5.Additional Contributions. No additional contributions shall be made to the trust after the initial contribution. The initial contri-
bution, however, shall be deemed to consist of all property passing to the trust by reason of my death.
6.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
7.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
8.Taxable Year. The taxable year of the trustshall be the calendar year.
9.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the Trustee is
prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification of the
trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
10.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
11.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
12.Definition of Initial Recipient and Successor Recipient. References to the Initial Recipient and/or the Successor Recipient
in this trust instrument shall be deemed to include the estate of the Initial Recipient and/or the Successor Recipient with regard to
August 22, 20054032005–34 I.R.B.

all provisions in this trust instrument that describe amounts payable to and/or due from the Initial Recipient and/or the Successor
Recipient. The prior sentence shall not apply to thedetermination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONSECUTIVE INTERESTS
.01Annotations for Introductory Paragraph of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 2055 for property contributed to the trust.
Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition of, and function exclusively
as, a charitable remainder trust from the creation of the trust.Section 1.664–1(a)(4). Solely for purposes of § 664, a trust
is deemed created at the earliest time that no person is treated as the owner of the entire trust under subpart E, part 1,
subchapter J, chapter 1, subtitle A of the Code (subpart E). For purposes of § 2055, a charitable remainder trust shall be
deemed created at the date of death of the decedent (even though the trust is not funded until the end of a reasonable period
of administration or settlement) if the obligation to pay theunitrust amount with respect to the property passing in trust at
the death of the decedent begins as of the date of death of the decedent, even though the requirement to pay this amount is
deferred in accordance with § 1.664–1(a)(5)(i). In addition, funding the trust with certain types of assets may disqualify a
charitable remainder trust. See § 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.06 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating tothe trustee’s duties and powers, as long as the provisions do
not conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder.
.02Annotations for Paragraph 1, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible recipients. For a CRUT with a unitrust period based on the lives of two individuals, the unitrust amount must
generally be paid to those individuals and both must be living at the time of the creation of the trust. See Rev. Rul. 2002–20,
2002–1 C.B. 794, for situations in which the unitrust amount may be paid to a trust for the benefit of an individual who is
financially disabled. An organization described in § 170(c) may receive part, but not all, of the unitrust amount. Section
664(d)(2)(A) and § 1.664–3(a)(3)(i). See section 6.01 of this revenue procedure for an alternate provision that provides for
payment of part of the unitrust amount toan organization described in § 170(c).
(2)Fixed percentage method. Paragraph 1, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.05 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.06 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.07 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(3)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(4)Payment of unitrust amount in installments. Paragraph 1, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to a recipient annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(5)Rules applicable to valuation. Paragraph 1, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
2005–34 I.R.B.404August 22, 2005

that the trust must file. Section 1.664–3(a)(1)(iv). Note that if the valuation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; and (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period. See § 1.664–3(a)(1)(v).
(6)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.03(1) of this revenue procedure for additional
information regarding the deferral of the payment of the unitrust amount until the end of the taxable year in which the trust
is completely funded.
(7)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(8)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c). If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotations for Paragraph 2, Deferral Provision, of the Sample Trust.
(1)Deferral of requirement to pay unitrust amount. The deferral provision in paragraph 2 of the sample trust authorizes defer-
ring the payment of the unitrust amount until the end of the taxable year of the trust in which the trust is completely funded.
Section 1.664–1(a)(5)(i) provides the operational rule for deferring payment of the unitrust amount in this circumstance.
The deferral provision in paragraph 2 ofthe sample trust uses the method for computing deferred payments that is provided
in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii) provides an alternate method for determining the amount described in
§ 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts payable plus interest on those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123,
provides sample language to be included in the governing instrument if the alternate method set forth in § 1.664–1(a)(5)(ii)
for determining the amount described in § 1.664–1(a)(5)(i)(b) is selected.
(2)Treatment of distributions. For the proper treatment of distributions to a charitable remainder trust or to a recipient during the
period of administration of an estate or settlement of a trust that is not a charitableremainder trust, see§ 1.664–1(a)(5)(iii).
.04Annotations for Paragraph 3, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
(2)Determining unitrust amount payable in year of each recipient’s death. Paragraph 3, Proration of Unitrust Amount, of the
sample trust specifies that, upon the death of the initial recipient, the next regular unitrust payment due shall be prorated
on a daily basis between the estate of theinitial recipient and the successor recipient. See section 6.03 of this revenue
procedure for an alternate provision thatterminates the payment of the initial recipient’s share of the unitrust amount with
the last regular payment preceding his or her death and/or terminates the payment of the unitrust amount with the last regular
payment preceding the termination of the unitrust period.
.05Annotations for Paragraph 4, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(3) of this revenue procedure, the value of the charitable remainder
interest (determined under § 7520) is required to be at least 10 percent of the net fair market value of the property contributed
to the trust as finally determined for federalestate tax purposes. Section 664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in §§ 170(c) and
2055(a) at the time of the transfer to the CRUT. See § 664(d)(2)(C). The trust instrument may restrict the charitable re-
mainderman to an organization described in §§ 170(c) and 2055(a), but grant to a trustee or other person the power to
designate the actual charitable remainderman. See section 6.04 of this revenue procedure for an alternate provision in
which a recipient is granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
August 22, 20054052005–34 I.R.B.

trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.07(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.06Annotations for Paragraph 6, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7
)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an indep
endent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarke
tableassetthatisvalued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a q
ualified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser w
hile others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the tru
st to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuati
on of unmarketable assets.
.07Annotations for Paragraph 7, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipients is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and an estate tax charitable deduction
is sought for the organization’s interest in the unitrust amount. See § 4947(b)(3). See section 6.01 of this revenue procedure
for an alternate provision that provides for payment of part of the unitrust amount to an organization described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as mod-
ified by § 4947(a)(1). Except as provided in paragraph 7 of the sample trust, the trust instrument may limit the application
of the provisions of § 508(e) to the period after the termination of the unitrust period when the trust continues in existence
for the benefit of the charitable remainderman.
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONSECUTIVE INTERESTS
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If an estate tax charitable deduction is sought for the present value of the unitrust interest passing to a
charitable organization, the trust instrument must contain additional provisions. First, the trust instrument must specify the
portion of each unitrust payment that is payable to the noncharitable recipients and to the charitable organization described
in §§ 170(c) and 2055(a). Second, the trust instrument must contain a means for selecting an alternative qualified charitable
organization if the designated organization is not a qualified organization at the time when any unitrust amount is to be
paid to it. Third, the trust instrument must contain prohibitions against investments that jeopardize the exempt purpose of
the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any excess business holdings
within the meaning of § 4943, as modified by § 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
2005–34 I.R.B.406August 22, 2005

“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient] percent of the unitrust amount to [permissible recip-
ient] (hereinafter “the Initial Recipient”), until the Initial Recipient’s death, and thereafter to [permissible recipient]
(hereinafter “the Successor Recipient”).In each taxable year of the trust during the unitrust period, the Trustee shall
pay [the percentage of unitrust amount payable to the charitable recipient] percent of the unitrust amount to [an or-
ganization described in §§ 170(c) and 2055(a) of the Code] (hereinafter “the Charitable Recipient”). The first day of
the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the death
of the survivor of the Initial Recipient and the Successor Recipient. If the Charitable Recipient is not an organization
described in §§ 170(c) and 2055(a) of the Code at the time when any unitrust payment is to be distributed to it, then
the Trustee shall distribute that unitrust payment to one or more organizations described in §§ 170(c) and 2055(a) of
the Code as the Trustee shall select, and in the proportions asthe Trustee shall decide, in theTrustee’s sole discretion.
The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income
and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the
unitrust amount shall be added to principal. If, for any year, the net fair market value of the trust assets is incorrectly
determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to
the Initial Recipient and/or the Successor Recipient and the Charitable Recipient (in the case of an undervaluation)
or receive from the Initial Recipient and/or the Successor Recipient and the Charitable Recipient (in the case of an
overvaluation) an amount equal to the difference betweenthe unitrust amount(s) properly payable and the unitrust
amount(s) actually paid.
(b)Replace each reference to “the Initial Recipient and/or Successor Recipient” in paragraph 2, Deferral Provision, of the
sample trust with a reference to “the Initial Recipient and/or Successor Recipient and the Charitable Recipient.”
(c)Replace the first parenthetical in paragraph 4, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the InitialRecipient and/or the Successor Recipient and the Charitable Recipient under
the terms of this trust)
(d)Add the following sentence after the first and only sentence in paragraph 7, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Qualified Contingency.
(1)Explanation. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency (as defined in § 664(f)(3)) or the death of the survivor of the initial recipient and the successor recipient. The
amount of the charitable deduction, however, will be determined without regard to a qualified contingency. See § 664(f)(2).
(2)Instructions for use. Replace the second sentence of paragraph 1, Payment of Unitrust Amount, of the sample trust with
the following sentence:
The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date
of the death of the survivor of the Initial Recipient and the Successor Recipient or, if earlier, the date on which occurs
the [qualified contingency].
.03Last Unitrust Payment to the Recipients.
(1)Explanation. As an alternative to prorating the unitrust amount in the taxable year of the initial recipient’s death, the obli-
gation to pay the unitrust amount to the initial recipient mayterminate with the last regular payment preceding the initial
recipient’s death. Similarly, as an alternative to proratingthe unitrust amount in the taxable year of the successor recipi-
ent’s death, the obligation to pay the unitrust amount may terminate with the last regular payment preceding the successor
recipient’s death. However, the fact that a recipient may not receive a finalprorated payment shall not be taken into account
for purposes of determining the present value of the remainder interest. Section 1.664–3(a)(5)(i). Note that although the
obligation to pay the unitrust amount to a recipient may terminate with the last regular payment preceding that recipient’s
death, the trustee must pay a recipient’s estate any amounts allocated to the payments payable before the recipient’s death
that are due as a result of an adjustment to the unitrust amount payable for that year, as in the case of an undervaluation.
(2)Instructions for use.
(a)To add an alternate provision to terminate the payment of the unitrust amount to the initial recipient with the last regular
payment preceding his or her death, replace paragraph 3, Proration of Unitrust Amount, ofthe sample trust with the
following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends,
the Trustee shall prorate on a daily basis the unitrust amount described in paragraph 1. If the Successor Recipient
survives the Initial Recipient, the obligation of the Trustee to pay the unitrust amount to the Initial Recipient shall
August 22, 20054072005–34 I.R.B.

terminate with the last regular quarterly installment preceding the death of theInitial Recipient, and the entire amount
of the first regular quarterly installment after the death of the Initial Recipient shall be paid to the Successor Recipient.
(b)To add an alternate provision to terminate the payment of the unitrust amount with the last regular payment preceding
the termination of the unitrust period, replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the
following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 1. If the Successor Recipient survives the Initial Recipient, the Trustee shall prorate on a
daily basis the next regular unitrust payment due after thedeath of the Initial Recipient between the estate of the
Initial Recipient and the Successor Recipient. In the taxable year of the trust during which the unitrust period ends,
the obligation of the Trustee to pay the unitrust amount shall terminate with the last regular quarterly installment
preceding the death of the survivor of the Initial Recipient and the Successor Recipient.
(c)To add an alternate provision terminating the payment of the unitrust amount to the initial recipient with the last regular
payment preceding his or her death, and terminating the payment of the unitrust amount with the last regular payment
preceding the termination of the unitrust period, replace paragraph 3, Prorationof Unitrust Amount, of the sample trust
with the following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 1. If the Successor Recipient survives the Initial Recipient, the obligation of the Trustee to
pay the unitrust amount to the Initial Recipient shall terminate with the last regular quarterly installment preceding
the death of the Initial Recipient, and the entire amount of thefirst regular quarterly installment after the death of the
Initial Recipient shall be paid to the Successor Recipient.In the taxable year of the trust during which the unitrust
period ends, the obligation of the Trustee to pay the unitrust amount shall terminate with the last regular quarterly
installment preceding the death of the survivor ofthe Initial Recipient and the Successor Recipient.
.04Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant a recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 4, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and
income of the trust (other than any amount due the Initial Recipient and/or the Successor Recipient under the terms of
this trust) to one or more charitable organizations described in §§ 170(c) and 2055(a) of the Code as [one of the named
permissible recipients] shall appoint and direct by specific reference to this power of appointment by inter vivos or
testamentary instrument. To the extent this power of appointment is not effectively exercised, the principal and income
not effectively appointed shall be distributed to one or more organizations described in §§ 170(c) and 2055(a) of the
Code as the Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee’s sole discretion. If
an organization fails to qualify as an organization described in §§ 170(c) and2055(a) of the Code at the time when any
principal or income of the trust is to be distributed to it, thenthe Trustee shall distribute the then principal and income
to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the
proportions as the Trustee shall decide, in the Trustee’s sole discretion.
.05Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 1 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
2005–34 I.R.B.408August 22, 2005

1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Initial Recipient”) until the Initial Recipient’s death, and thereafter to [permissible recipient] (hereinafter “the
Successor Recipient”), a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number
no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the
valuation date (hereinafter “the fixed percentage amountdescribed in (a) of paragraph 1”) or (b) the trust income for
the taxable year as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day
of each taxable year of the trust. The first day of the unitrust period shall be the date of my death and the last day of
the unitrust period shall be the date of the death of the survivor of the Initial Recipient and the Successor Recipient.
The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income.
Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such
a year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a)
of paragraph 1 to determine the unitrust amount payable for that year. If the Successor Recipient survives the Initial
Recipient, the Trustee shall prorate ona daily basis the next regular unitrust payment due after the death of the Initial
Recipient between the estate of the Initial Recipient and the Successor Recipient.
.06Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 1 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.05 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipients in prior years was less than the amounts that would have been paid to the recipients if the unitrust amount
had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.05(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient] (hereinafter
“the Initial Recipient”) until the Initial Recipient’s death, and thereafter to [permissible recipient] (hereinafter “the
Successor Recipient”), a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [anumberno
less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the valuation
date (hereinafter “the fixed percentage amount described in(a)ofparagraph1”)or(b)thetrustincomeforthetaxable
year as defined in § 643(b) of the Code and the applicableregulations. The unitrust amount for a taxable year shall
also include any amount of trust income for the year that is in excess of [the fixed percentage amount determined
under (a) of this paragraph for the year], but only to the extent that the aggregate of the amounts paid in prior years,
whether to the Initial Recipient or to the Successor Recipient, was less than theaggregate of the amounts determined
for all prior years under (a) of this paragraph. The valuation date is the first day of each taxable year of the trust. The
first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date
of the death of the survivor of the Initial Recipient and the Successor Recipient. The unitrust amount shall be paid in
equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable
year in excess of the unitrust amount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such
August 22, 20054092005–34 I.R.B.

a year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a)
of paragraph 1 to determine the unitrust amount payable for that year. If the Successor Recipient survives the Initial
Recipient, the Trustee shall prorate ona daily basis the next regular unitrust payment due after the death of the Initial
Recipient between the estate of the Initial Recipient and the Successor Recipient.
.07Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.05 of this revenue procedure) or the net income with make-up
method (described in section 6.06 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method of
calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and(d)),
for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time conversion
from the net income or the net income with make-up method tothe fixed percentage method of calculation, the governing
instrument must provide that: (i) the change in method is triggeredonaspecificdateorbyasingle event whose occurrence
is not discretionary with, or within the control of, the trustees or any other persons; (ii)the change in method occurs at
the beginning of the taxable year that immediately follows the taxable year during which the permissible triggering event
occurs; and (iii) following the trust’s conversion to the fixed percentage method, the trust will pay at least annually to the
initial recipient and/or the successor recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described in
§ 1.664–3(a)(1)(i)(b). Section 1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2)thatis
not paid by the beginning of the taxable year immediately following the taxable year during which the permissible trigger-
ing event occurs shall be forfeited bythe initial recipient and/or successor recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods. To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period, the
Trustee shall pay to [permissible recipient] (hereinafter “the InitialRecipient”) until the Initial Recipient’s death, and
thereafter to [permissible recipient] (hereinafter “the Successor Recipient”), a unitrust amount equal to the lesser of
(a) a fixed percentage amount equal to [anumbernolessthan5andnomorethan50] percent of the net fair market
value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount described in
(a) of paragraph 1(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable
regulations. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from
income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Regula-
tions] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately follows
the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable year of the
trust during the unitrust period, the Trustee shall pay to the Initial Recipient until his or her death, and thereafter to
the Successor Recipient, a unitrust amount equal to [same percentage used in (a) of paragraph 1(i)] percent of the net
fair market value of the trust assets as of the valuation date. Beginning on the effective date of the triggering event,
the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in paragraph 1(i). The unitrust amount shall
be paid in equal quarterly installments at the end of each calendar quarter from income and, to the extent income is
not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(iii)In general. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the date of the death of the survivor of the Initial Recipient and the Successor Recipient. The valuation
date is the first day of each taxable year of the trust. If, for any year, the net fair market value of the trust assets
is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee
shall pay to the Initial Recipient and/or the Successor Recipient (in the case of an undervaluation)or receive from the
Initial Recipient and/or the Successor Recipient (in the case of an overvaluation) an amount equal to the difference
between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
2005–34 I.R.B.410August 22, 2005

prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of paragraph 1(i)
to determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
(iii)Proration of unitrust amount between Initial Recipient and Successor Recipient. If the Successor Recipient sur-
vives the Initial Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the
death of the Initial Recipient between the estate of the Initial Recipient and the Successor Recipient.
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the unitrust
period, the Trustee shall pay to [permissible recipient] (hereinafter “the Initial Recipient”) until the Initial Recipient’s
death, and thereafter to [permissible recipient] (hereinafter “the Successor Recipient”), a unitrust amount equal to the
lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of the net
fair market value of the assets of the trust valued as of the valuation date (hereinafter “the fixed percentage amount
described in (a) of paragraph 1(i)”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code and
the applicable regulations. The unitrust amount for a taxable year shall also include any amount of trust income for the
year that is in excess of [the fixed percentage amount determined under (a) of paragraph 1(i) for the year], but only
to the extent that the aggregate of the amounts paid in prioryears, whether to the Initial Recipient or to the Successor
Recipient, was less than the aggregate of the amounts determined for all prior years under (a) of paragraph 1(i). The
unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income. Any
income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Regula-
tions] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately follows
the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable year of the
trust during the unitrust period, the Trustee shall pay to the Initial Recipient until his or her death, and thereafter to
the Successor Recipient, a unitrust amount equal to [same percentage used in (a) of paragraph 1(i)] percent of the net
fair market value of the trust assets as of the valuation date. Beginning on the effective date of the triggering event,
the Trustee shall no longer pay the amount equal to the lesser of (a) or (b) in paragraph 1(i) and shall not pay any
amount of trust income described in the second sentence of paragraph 1(i). The unitrust amount shall be paid in equal
quarterly installments at the end of each calendar quarter fromincome and, to the extent income is not sufficient, from
principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the date of the death of the survivor of the Initial Recipient and the Successor Recipient. The valuation
date is the first day of each taxable year of the trust. If, for any year, the net fair market value of the trust assets
is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee
shall pay to the Initial Recipient and/or the Successor Recipient (in the case of an undervaluation) or receive from the
Initial Recipient and/or the Successor Recipient (in the case of an overvaluation) an amount equal to the difference
between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixedpercentage amount described in (a) of paragraph 1(i) to
determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
August 22, 20054112005–34 I.R.B.

(iii)ProrationofunitrustamountbetweenInitial Recipient and Successor Recipient. If the Successor Recipient survives
the Initial Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death of
the Initial Recipient between the estate of theInitial Recipient and the Successor Recipient.
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES
Section 7 of Rev. Proc. 90–30 and section 8of Rev. Proc. 90–31 are superseded.
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also Part I, §§ 170, 664, 2055; 1.170A–6, 1.664–1, 1.664–3, 1.664–4, 20.2055–2.)
Rev. Proc. 2005–59
SECTION 1. PURPOSE
This revenue procedure contains an annotated sample declaration of trust and alternateprovisions that meet the requirements of
§ 664(d)(2) and (d)(3) of the Internal Revenue Code for a testamentary charitable remainder unitrust (CRUT) providing for unitrust
payments payable concurrently and consecutively for two measuring lives followed by the distribution of trust assets to a charitable
remainderman.
SECTION 2. BACKGROUND
Previously, the Internal Revenue Serviceissued sample trust instruments for certain types of CRUTs. The Service is updating
the previously issued samples and issuing new samples for additional types of CRUTs; annotations and alternate sample provisions
are included as further guidance. In addition to the sample trust instrument included in this revenue procedure for a testamentary
CRUT providing for unitrust payments payable concurrently and consecutively for two measuring lives, samples are provided in
other separate revenue procedures for:
(a)an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005–52, superseding Rev.
Proc. 89–20, 1989–1 C.B. 841, and section 4 of Rev. Proc. 90–31, 1990–1 C.B. 539);
(b)an inter vivos CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–53);
(c)an inter vivos CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–54, superseding section 4 of Rev. Proc. 90–30, 1990–1 C.B. 534, and section 5 of Rev. Proc. 90–31);
(d)an inter vivos CRUT providing for unitrust payments payableconcurrently and consecutively for two measuring lives (see
Rev. Proc. 2005–55, superseding section 5 of Rev. Proc. 90–30 and section 6 of Rev. Proc. 90–31);
(e)a testamentary CRUT providing for unitrust payments for onemeasuring life (see Rev. Proc.2005–56, superseding section
6 of Rev. Proc. 90–30 and section 7 of Rev. Proc. 90–31);
(f)a testamentary CRUT providing for unitrust payments for a term of years (see Rev. Proc. 2005–57); and
(g)a testamentary CRUT providing for unitrust payments payable consecutively for two measuring lives (see Rev. Proc.
2005–58, superseding section 7 of Rev. Proc.90–30 and section 8 of Rev. Proc. 90–31).
SECTION 3. SCOPE AND OBJECTIVE
Section 4 of this revenue procedure provides a sample declaration of trust for a testamentary CRUT having concurrent and consec-
utive unitrust interests for two measuring lives that is created by an individual who is a citizen or resident of the United States. Section
5 of this revenue procedure provides annotations to the provisions of the sample trust. Section 6 of this revenue procedure provides
samples of certain alternate provisions concerning: (.01) the payment of part of the unitrust amount to an organization described in
§ 170(c); (.02) a qualified contingency; (.03) the last unitrust payments to the recipients; (.04) a power of appointment to designate the
charitable remainderman; (.05) the net income method of calculating the unitrust amount; (.06) the net income with make-up method
of calculating the unitrust amount; and (.07) a combination of methods for calculating the unitrust amount.
For transfers to a qualifying CRUT, as defined in § 664(d)(2) and, if applicable, § 664(d)(3), the remainder interest will be deductible
by a citizen or resident of the United States under § 2055(e)(2)(A) for estate tax purposes if the other requirements of § 2055(e)(2)(A)
(that is, the requirements not relating to the provisions of the governing instrument) also are met. The Service will recognize a trust
2005–34 I.R.B.412August 22, 2005

as a qualified CRUT meeting all of the requirements of § 664(d)(2) and, if applicable, § 664(d)(3), if the trust operates in a manner
consistent with the terms of the trust instrument, if the trust is a valid trust under applicable local law, and if the trust instrument: (i) is
substantially similar to the sample in section 4 of this revenue procedure; or (ii) properly integrates one or more alternate provisions
from section 6 of this revenue procedure into a document substantially similar to the sample in section 4 of this revenue procedure.
A trust that contains substantive provisions in addition to those provided in section 4 of this revenue procedure (other than properly
integrated alternate provisions from section 6 of this revenue procedure or provisions necessary to establish a valid trust under appli-
cable local law that are not inconsistent with the applicable federal tax requirements), orthat omits any of the provisions of section
4 of this revenue procedure (unless an alternate provision from section 6 of this revenue procedure is properly integrated), will not
necessarily be disqualified, but neither will that trust be assured of qualification under the provisions of this revenue procedure. The
Service generally will not issue a letter ruling on whether a testamentary trust created by an individual and having concurrent and
consecutive unitrust interests for two measuring lives qualifies as a CRUT. The Service, however, generally will issue letter rulings on
the effect of substantive trust provisions, other than those contained in sections 4 and 6 of this revenue procedure, on the qualification
ofatrustasaCRUT.
SECTION 4. SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST — TWO LIVES,
CONCURRENT AND CONSECUTIVE INTERESTS
I give, devise, and bequeath [property bequeathed] to my Trustee in trust to be administered under this provision. I intend this
bequest to establish a charitable remainder unitrust, within the meaning of Rev. Proc. 2005–59 and § 664(d)(2) of the Internal Revenue
Code (hereinafter “the Code”). The trust shall be known as the
Charitable Remainder Unitrust and I hereby designate
as the initial trustee (hereinafter “the Trustee”).
1.PaymentofUnitrustAmount. In each taxable year of the trust during theunitrust period, the Trustee shall pay to [permissible
recipient]andto[permissible recipient] (hereinafter “the Recipients”) in equal shares during their joint lives, a unitrust amount equal
to [a number no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the
first day of each taxable year of the trust (hereinafter “the valuation date”) and, upon thedeath of one (hereinafter “the Predeceasing
Recipient”), the Trustee shall pay the entire unitrust amount to the survivor (hereinafter “the SurvivorRecipient”). The first day of the
unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Survivor Recipient’s death.
The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income and, to the extent
income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to
principal. If, for any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after
the correct value is finally determined, the Trustee shall pay to the Predeceasing Recipient and/or theSurvivor Recipient (in the case
of an undervaluation) or receive from the Predeceasing Recipient and/or the SurvivorRecipient (in the case of an overvaluation) an
amount equal to the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
2.Deferral Provision. The obligation to pay the unitrust amount shall commence with the date of my death, but payment of the
unitrust amount may be deferred from this date until the end of the taxable year in which the trust is completely funded. Within a
reasonable time after the end of the taxable year in which the trust is completely funded, the Trustee must pay to the Predeceasing Re-
cipient and/or the Survivor Recipient (in the case of an underpayment) or receive from the Predeceasing Recipient and/or the Survivor
Recipient (in the case of an overpayment) the difference between any unitrust amounts actually paid, plus interest, and the unitrust
amounts payable, plus interest. The interest shall be computed for any period atthe rate of interest, compounded annually, that the
federal income tax regulations under § 664 of the Code prescribe for this computation.
3.Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1. Upon the death of the Predeceasing Recipient, the Trustee
shall prorate on a daily basis the next regular unitrust payment due after the death of the Predeceasing Recipient between the estate of
the Predeceasing Recipient and the Survivor Recipient.
4.Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income
of the trust (other than any amount due the Predeceasing Recipient and/or the Survivor Recipient under the terms of this trust) to [des-
ignated remainderman] (hereinafter “the Charitable Organization”). If the Charitable Organization is notan organization described in
§§ 170(c) and 2055(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall
distribute the then principal and income to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee
shall select, and in the proportionsas the Trustee shall decide, in the Trustee’s sole discretion.
5.Additional Contributions. No additional contributions shall be made to the trust after the initial contribution. The initial contri-
bution, however, shall be deemed to consist of all property passing to the trust by reason of my death.
6.Unmarketable Assets. Whenever the value of a trust asset must be determined, the Trustee shall determine the value of any assets
that are not cash, cash equivalents, or other assets that can be readilysold or exchanged for cash or cash equivalents (hereinafter “un-
marketable assets”), by either (a) obtaininga current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3)
and § 1.170A–13(c)(5) of the Income Tax Regulations, respectively, or(b) ensuring the valuation of these unmarketable assets is per-
formed exclusively by an “independent trustee,” within the meaning of § 1.664–1(a)(7)(iii) of the Income Tax Regulations.
August 22, 20054132005–34 I.R.B.

7.Prohibited Transactions. The Trustee shall not engage in any act of self-dealing within the meaning of § 4941(d) of the Code, as
modified by § 4947(a)(2)(A) of the Code, and shall not make any taxable expenditures within the meaning of § 4945(d) of the Code,
as modified by § 4947(a)(2)(A) of the Code.
8.Taxable Year. The taxable year of the trustshall be the calendar year.
9.Governing Law. The operation of the trust shall be governed by the laws of the State of
. However, the Trustee is
prohibited from exercising any power or discretion granted under said laws that would be inconsistent with the qualification of the
trust as a charitable remainder unitrust under § 664(d)(2) of the Code and the corresponding regulations.
10.Limited Power of Amendment. This trust is irrevocable. However, the Trustee shall have the power, acting alone, to amend the
trust from time to time in any manner required for the sole purposeof ensuring that the trust qualifies and continues to qualify as a
charitable remainder unitrust within the meaning of § 664(d)(2) of the Code.
11.Investment of Trust Assets. Nothing in this trust instrument shall be construed to restrict the Trustee from investing the trust
assets in a manner that could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of
trust assets.
12.Definition of Predeceasing Recipient and Survivor Recipient. References to the Predeceasing Recipient and/or the Survivor
Recipient in this trust instrument shall be deemed to include the estate of the Predeceasing Recipient and/or theSurvivor Recipient
with regard to all provisions in this trust instrument that describe amounts payable to and/or due from the Predeceasing Recipient
and/or the Survivor Recipient. The prior sentence shall not apply to the determination of the last day of the unitrust period.
SECTION 5. ANNOTATIONS REGARDING SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONCURRENT AND CONSECUTIVE INTERESTS
.01Annotations for Introductory Paragraph of the Sample Trust.
(1)Factors concerning qualification of trust. A deduction must be allowable under § 2055 for property contributed to the trust.
Section 1.664–1(a)(1)(iii)(a) of the Income Tax Regulations. The trust must meet the definition of, and function exclusively
as, a charitable remainder trust from the creation of the trust.Section 1.664–1(a)(4). Solely for purposes of § 664, a trust
is deemed created at the earliest time that no person is treated as the owner of the entire trust under subpart E, part 1,
subchapter J, chapter 1, subtitle A of the Code (subpart E). For purposes of § 2055, a charitable remainder trust shall be
deemed created at the date of death of the decedent (even though the trust is not funded until the end of a reasonable period
of administration or settlement) if the obligation to pay theunitrust amount with respect to the property passing in trust at
the death of the decedent begins as of the date of death of the decedent, even though the requirement to pay this amount is
deferred in accordance with § 1.664–1(a)(5)(i). In addition, funding the trust with certain types of assets may disqualify a
charitable remainder trust. See § 1.664–1(a)(7) and Rev. Rul. 73–610, 1973–2 C.B. 213.
(2)Valuation of unmarketable assets. If the trust is funded with unmarketable assets, the net fair market value of the assets
must be determined exclusively by an independent trustee,as defined in § 1.664–1(a)(7)(iii), or must be determined by a
current “qualified appraisal” from a “qualified appraiser,” as defined in § 1.170A–13(c)(3) and (c)(5), respectively. Section
1.664–1(a)(7). See section 5.06 of this revenue procedure forfurther guidance related to the valuation of unmarketable
assets.
(3)Trustee provisions. Alternate or successor trustees may be designated in the trust instrument. In addition, the trust instru-
ment may contain other administrative provisions relating tothe trustee’s duties and powers, as long as the provisions do
not conflict with the rules governing charitable remainder trusts under § 664 and the regulations thereunder.
.02Annotations for Paragraph 1, Payment of Unitrust Amount, of the Sample Trust.
(1)Permissible recipients. For a CRUT with a unitrust period based on the lives of two individuals, the unitrust amount must
generally be paid to those individuals and both must be living at the time of the creation of the trust. See Rev. Rul. 2002–20,
2002–1 C.B. 794, for situations in which the unitrust amount may be paid to a trust for the benefit of an individual who is
financially disabled. An organization described in § 170(c) may receive part, but not all, of the unitrust amount. Section
664(d)(2)(A) and § 1.664–3(a)(3)(i). See section 6.01 of this revenue procedure for an alternate provision that provides for
payment of part of the unitrust amount toan organization described in § 170(c).
(2)Fixed percentage method. Paragraph 1, Payment of Unitrust Amount, of the sample trust calculates the unitrust amount
under the fixed percentage method by using a fixed percentage of the net fair market value of the trust assets valued annually.
See section 6.05 of this revenue procedure for an alternate provision that uses the net incomemethod for calculating the
unitrust amount. See section 6.06 of this revenue procedure foran alternate provision that uses the net income with make-up
method for calculating the unitrust amount. See section 6.07 of this revenue procedure for an alternate provision that uses
a combination of methods for calculating the unitrust amount as described in § 1.664–3(a)(1)(i)(c).
(3)Division of unitrust amount between recipients. The sample trust provides that while both recipients are alive they will
share the unitrust amount equally and, upon the death of the predeceasing recipient,the survivor recipient will receive all
2005–34 I.R.B.414August 22, 2005

of the unitrust amount, subject to any proration in paragraph 3. However, the unitrust amount may be divided other than
equally during the joint lives of the recipients. In addition, the share ofthe predeceasing recipient may be made payable to
an organization described in § 170(c) for the rest of the survivor recipient’s life.
(4)Percentage requirements. The fixed percentage unitrust amount must be at least 5 percent and not more than 50 percent of
the annual net fair market value of the assets in the trust. Section 664(d)(2)(A). In addition, with respect to each contribution
of property to the trust, the value of the charitable remainder interest (determined under § 7520) is required to be at least
10 percent of the net fair market value of the contributed property as of the date of its contribution to the trust. Section
664(d)(2)(D).
(5)Payment of unitrust amount in installments. Paragraph 1, Payment of Unitrust Amount, of the sample trust specifies that
the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument
may specify that the unitrust amount is to be paid to the recipients annually or in equal or unequal installments throughout
the year. See § 1.664–3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by
whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the
period. See § 1.664–3(c) and § 1.664–4.
(6)Rules applicable to valuation. Paragraph 1, Payment of Unitrust Amount, ofthe sample trust specifies that the net fair
market value of trust assets is to be valued as of the first day of each taxable year of the trust. However, the value of the
trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations
made on more than one date during the taxable year of the trust,solongasthesamevaluation date or dates and the same
valuation methods are used each year. If the governing instrument does not specifythe valuation date or dates, the trustee
must select the date or dates and indicate the selection on the first Form 5227, “Split-Interest Trust Information Return,”
that the trust must file. Section 1.664–3(a)(1)(iv). Note that if the valuation date is a date other than the first day of each
taxable year of the trust, it may be necessary to modify the provisions in the sample trust regarding: (i) the timing of the
payment of the unitrust amount; and (ii) the proration of the unitrust amount in a short taxable year and the last taxable year
of the unitrust period. See § 1.664–3(a)(1)(v).
(7)Payment of unitrust amount by close of taxable year. Generally, the unitrust amount for any taxable year, if computed under
the fixed percentage method, must be paid before the close of the taxable year for which it is due. For circumstances under
which the unitrust amount computed under the fixed percentage method may be paid within a reasonable time after the
close of the taxable year, see § 1.664–3(a)(1)(i)(g)and(k). See section 5.03(1) of this revenue procedure for additional
information regarding the deferral of the payment of the unitrust amount until the end of the taxable year in which the trust
is completely funded.
(8)Incorrect valuations. Nothing in § 664 or the regulations thereunder requires that interest be paid on the amount of
any underpayment or overpayment of the unitrust amount resulting from the incorrect valuation of trust assets. Section
1.664–3(a)(1)(iii). Notwithstandingthe foregoing, state law may require the payment of interest on the amount of any
such underpayment or overpayment of the unitrust amount.
(9)Early distributions to charity. The trust instrument may provide that an amount other than the unitrust amount shall be
paid (or may be paid in the discretion of the trustee) to an organization described in § 170(c). If such a distribution is made
in kind, the adjusted basis of the property distributed must be fairly representative of the adjusted basis of the property
available for distribution on the date of distribution. Section 1.664–3(a)(4).
.03Annotations for Paragraph 2, Deferral Provision, of the Sample Trust.
(1)Deferral of requirement to pay unitrust amount. The deferral provision in paragraph 2 of the sample trust authorizes defer-
ring the payment of the unitrust amount until the end of the taxable year of the trust in which the trust is completely funded.
Section 1.664–1(a)(5)(i) provides the operational rule for deferring payment of the unitrust amount in this circumstance.
The deferral provision in paragraph 2 ofthe sample trust uses the method for computing deferred payments that is provided
in § 1.664–1(a)(5)(i). Note that § 1.664–1(a)(5)(ii) provides an alternate method for determining the amount described in
§ 1.664–1(a)(5)(i)(b),i.e., the unitrust amounts payable plus interest on those amounts. Rev. Rul. 92–57, 1992–2 C.B. 123,
provides sample language to be included in the governing instrument if the alternate method set forth in § 1.664–1(a)(5)(ii)
for determining the amount described in § 1.664–1(a)(5)(i)(b) is selected.
(2)Treatment of distributions. For the proper treatment of distributions to a charitable remainder trust or to the recipients
during the period of administration of an estate or settlement of a trust that is not a charitable remainder trust, see
§ 1.664–1(a)(5)(iii).
.04Annotations for Paragraph 3, Proration of Unitrust Amount, of the Sample Trust.
(1)Prorating unitrust amount. To compute the unitrust amount in a short taxable year and in the taxable year in which the
unitrust period terminates, see § 1.664–3(a)(1)(v)(a)and(b), respectively.
August 22, 20054152005–34 I.R.B.

(2)Determining unitrust amount payable in year of each recipient’s death. Paragraph 3, Proration of Unitrust Amount, of
the sample trust specifies that, upon the death of the predeceasing recipient,the next regular unitrust payment due shall
be prorated on a daily basis between the estate of the predeceasing recipient and the survivor recipient. See section 6.03
of this revenue procedure for an alternate provision that terminates the payment of the predeceasing recipient’s share of
the unitrust amount with the last regular payment preceding his or her death and/or terminates the payment of the unitrust
amount with the last regular payment preceding the termination of the unitrust period.
.05Annotations for Paragraph 4, Distribution to Charity, of the Sample Trust.
(1)Minimum value of remainder. As noted in section 5.02(4) of this revenue procedure, the value of the charitable remainder
interest (determined under § 7520) is required to be at least 10 percent of the net fair market value of the property contributed
to the trust as finally determined for federalestate tax purposes. Section 664(d)(2)(D).
(2)Distribution to remainderman. The trustee of a charitable remainder trust hasa reasonable time after the termination of the
unitrust period to complete the settlement of the trust, including making the required distributions. See § 1.664–3(a)(6)(ii).
(3)Designated remainderman. Any named charitable remainderman must be an organization described in §§ 170(c) and
2055(a) at the time of the transfer to the CRUT. See § 664(d)(2)(C). The trust instrument may restrict the charitable re-
mainderman to an organization described in §§ 170(c) and 2055(a), but grant to a trustee or other person the power to
designate the actual charitable remainderman. See section 6.04 of this revenue procedure for an alternate provision in
which a recipient is granted a power of appointment to designate the charitable remainderman.
(4)Multiple remaindermen. The remainder interest may pass to more than onecharitable organization as long as each organi-
zation is described in §§ 170(c) and2055(a). Section 1.664–3(a)(6)(i).
(5)Alternative remaindermen. The trust instrument of a CRUT must provide a means for selecting alternative charitable re-
maindermen in the event any designated organization is not qualified at the time any payments are to be made to it from the
trust. Section 1.664–3(a)(6)(iv). This requirement is satisfied in the sample trust by conferring the power upon the trustee
to designate an alternative charitable remainderman. Note that the donor may designate one or more alternative charitable
remaindermen in the trust instrument; however, the trust instrument must continue to provide a means for selecting an al-
ternative charitable remainderman if any designated organization is not qualified at the time payments are to be made to it
from the trust.
(6)Continuing trust for charity. Upon the expiration of the unitrust period, the trust may continue in existence for charity. See
§ 1.664–3(a)(6)(ii). See section 5.07(3)of this revenue procedure for certain governing instrument requirements that apply
when the trust continues in existence for charity.
.06Annotations for Paragraph 6, Unmarketable Assets, of the Sample Trust.
(1)Multiple trustees. Any co-trustee who is an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), may value the
trust’s unmarketable assets.
(2)Valuation using qualified appraisal or independent trustee. The trustee may alternately use an independent trustee or a
qualified appraisal by a qualified appraiser to value unmarketable assets. For instance, an unmarketable asset that is valued
in one year by an independent trustee may be valued in a successive year by a qualified appraiser in a qualified appraisal.
In addition, within a single year, some unmarketable assets may be valued by a qualified appraiser while others are valued
by an independent trustee.
(3)Appointment of independent trustee. The governing instrument may authorize the trustee of the trust to appoint from time
to time an independent trustee, within the meaning of § 1.664–1(a)(7)(iii), to perform the valuation of unmarketable assets.
.07Annotations for Paragraph 7, Prohibited Transactions, of the Sample Trust.
(1)Payment of the unitrust amount. Payment of the unitrust amount to the recipients is not considered an act of self-dealing
within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d),
as modified by § 4947(a)(2)(A). Section 53.4947–1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
(2)Prohibitions against certain investments and excess business holdings. Prohibitions against investments that jeopardize
the exempt purpose of the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any
excess business holdings within the meaning of § 4943, as modified by § 4947(a)(2)(A), are required if the trust provides
for payment of any part of a unitrust amount to an organization described in § 170(c) and an estate tax charitable deduction
is sought for the organization’s interest in the unitrust amount. See § 4947(b)(3). See section 6.01 of this revenue procedure
for an alternate provision that provides for payment of part of the unitrust amount to an organization described in § 170(c).
(3)Trust to continue in existence for benefit of charity. The governing instrument requirements of § 508(e) must be included
in the trust instrument if, after the termination of the unitrust period: (i) the trust instrument provides that the trust shall
continue in existence for the benefit of the charitable remainderman and, as a result, the trust will become subject to the
2005–34 I.R.B.416August 22, 2005

provisions of § 4947(a)(1); and (ii) the trust will be treated as a private foundation within the meaning of § 509(a), as mod-
ified by § 4947(a)(1). Except as provided in paragraph 7 of the sample trust, the trust instrument may limit the application
of the provisions of § 508(e) to the period after the termination of the unitrust period when the trust continues in existence
for the benefit of the charitable remainderman.
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE TESTAMENTARY CHARITABLE REMAINDER
UNITRUST — TWO LIVES, CONCURRENT AND CONSECUTIVE INTERESTS
.01Payment of Part of the Unitrust Amount to an Organization Described in § 170(c).
(1)Explanation. An organization described in § 170(c) may receivepart, but not all, of any unitrust amount. Section
664(d)(2)(A). If an estate tax charitable deduction is sought for the present value of the unitrust interest passing to a
charitable organization, the trust instrument must contain additional provisions. First, the trust instrument must specify the
portion of each unitrust payment that is payable to the noncharitable recipients and to the charitable organization described
in §§ 170(c) and 2055(a). Second, the trust instrument must contain a means for selecting an alternative qualified charitable
organization if the designated organization is not a qualified organization at the time when any unitrust amount is to be
paid to it. Third, the trust instrument must contain prohibitions against investments that jeopardize the exempt purpose of
the trust within the meaning of § 4944, as modified by § 4947(a)(2)(A), and against retaining any excess business holdings
within the meaning of § 4943, as modified by § 4947(a)(2)(A).
(2)Instructions for use.
(a)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
Payment of Unitrust Amount. The unitrust amount is equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter
“the valuation date”). In each taxable year of the trustduring the unitrust period, the Trustee shall pay [the percentage
of the unitrust amount payable to the noncharitable recipient]percentoftheunitrustamountto[permissible recipient]
and [permissible recipient] (hereinafter “the Recipients”) in equal shares during their joint lives and, upon the death
of one (hereinafter “the Predeceasing Recipient”), the Trustee shall pay that entire percentage of the unitrust amount
to the survivor (hereinafter “the Survivor Recipient”). In each taxable year ofthe trust during theunitrust period,
the Trustee shall pay [the percentage of unitrust amount payable to the charitable recipient] percent of the unitrust
amount to [an organization described in §§ 170(c) and 2055(a) of the Code] (hereinafter “the Charitable Recipient”).
The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the
date of the Survivor Recipient’s death. If the Charitable Recipient is not an organization described in §§ 170(c) and
2055(a) of the Code at the time when any unitrust payment isto be distributed to it, then the Trustee shall distribute
that unitrust payment to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee
shall select, and in the proportions as the Trustee shall decide, in the Trustee’s sole discretion. The unitrust amount
shall be paid in equal quarterly installments at the end ofeach calendar quarter from income and, to the extent income
is not sufficient, from principal. Any income of the trustfor a taxable year in excess of the unitrust amount shall be
added to principal. If, for any year, the net fair market valueof the trust assets is incorrectly determined, then within
a reasonable period after the correct value is finally determined, the Trustee shall pay to the Predeceasing Recipient
and/or the Survivor Recipient and the Charitable Recipient (in the case of an undervaluation) or receive from the
Predeceasing Recipient and/or the Survivor Recipient and the Charitable Recipient (in the case of an overvaluation)
an amount equal to the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually
paid.
(b)Replace each reference to “the Predeceasing Recipient and/or Survivor Recipient” in paragraph 2, Deferral Provision, of
the sample trust with a reference to “the Predeceasing Recipient and/or Survivor Recipient and the Charitable Recipient.”
(c)Replace the first parenthetical in paragraph 4, Distribution to Charity, of the sample trust with the following parenthetical:
(other than any amount due the Predeceasing Recipient and/or the Survivor Recipient and the Charitable Recipient
under the terms of this trust)
(d)Add the following sentence after the first and only sentence in paragraph 7, Prohibited Transactions, of the sample trust:
The Trustee shall not make any investments that jeopardize the exempt purpose of the trust within the meaning of
§ 4944 of the Code, as modified by § 4947(a)(2)(A) of the Code, or retain any excess business holdings within the
meaning of § 4943 of the Code, as modified by § 4947(a)(2)(A) of the Code.
.02Qualified Contingency.
(1)Explanation. Under § 664(f), payment of the unitrust amount may terminate upon the earlier of the occurrence of a qualified
contingency (as defined in § 664(f)(3)) or the death of the survivor recipient. The amount of the charitable deduction,
however, will be determined without regard to a qualified contingency. See § 664(f)(2).
August 22, 20054172005–34 I.R.B.

(2)Instructions for use. Replace the second sentence of paragraph 1, Payment of Unitrust Amount, of the sample trust with
the following sentence:
The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date
of the Survivor Recipient’s death or, ifearlier, the date on which occurs the [qualified contingency].
.03Last Unitrust Payment to the Recipients.
(1)Explanation. As an alternative to prorating the unitrust amount in the taxable year of the predeceasing recipient’s death,
the obligation to pay the predeceasing recipient’s share of the unitrust amount mayterminate with the last regular payment
preceding the predeceasing recipient’s death. Similarly, as an alternative to prorating the unitrust amount in the taxable
year of the survivor recipient’s death, the obligation to pay the unitrust amount may terminate with the last regular payment
preceding the survivor recipient’s death. However, the fact that a recipient may not receive a final prorated payment shall
not be taken into account for purposes of determining the present value of the remainder interest. Section 1.664–3(a)(5)(i).
Note that although the obligation to pay the unitrust amount or, in the case of the predeceasing recipient, a share of the
unitrust amount to a recipient, may terminate with the last regular payment preceding that recipient’s death, the trustee
must pay a recipient’s estate any amounts allocated to the payments payable before the recipient’s death that are due as a
result of an adjustment to the unitrust amount payable for that year, as in the case of an undervaluation.
(2)Instructions for use.
(a)To add an alternate provision to terminate the payment of thepredeceasing recipient’s shareof the unitrust amount with
the last regular payment preceding his or her death, replaceparagraph 3, Proration of Unitrust Amount, of the sample
trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the unitrust amount described in paragraph 1. Upon the death of
the Predeceasing Recipient, the obligation of the Trustee to pay a share of the unitrust amount to the Predeceasing
Recipient shall terminate with the last regular quarterly installment preceding the death of the Predeceasing Recipient,
and the Predeceasing Recipient’s share ofthe unitrust amount shall thereafter be added to and paid as part of the share
of the Survivor Recipient.
(b)To add an alternate provision to terminate the payment of the unitrust amount with the last regular payment preceding
the termination of the unitrust period, replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the
following paragraph.
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 1. Upon the death of the Predeceasing Recipient, the Trustee shall prorate on a daily basis the
next regular unitrust payment due after the death of the Predeceasing Recipient between the estate of the Predeceasing
Recipient and the Survivor Recipient. Inthe taxable year of the trust during which the unitrust period ends, the obli-
gation of the Trustee to pay the unitrust amount shall terminate with the last regular quarterly installment preceding
the death of the Survivor Recipient.
(c)To add an alternate provision terminating the payment of the predeceasing recipient’s share of the unitrust amount with
the last regular payment preceding his or her death, and terminating the payment of the unitrust amount with the last
regular payment preceding the termination of the unitrust period, replace paragraph 3, Proration of Unitrust Amount, of
the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year, the Trustee shall prorate on a daily basis the unitrust amount
described in paragraph 1. Upon the death of the Predeceasing Recipient, the obligation of the Trustee to pay a share of
the unitrust amount to the Predeceasing Recipient shall terminate with the last regular quarterly installment preceding
the death of the Predeceasing Recipient, and the Predeceasing Recipient’s share of the unitrust amount shall thereafter
be added to and paid as part of the share of the Survivor Recipient. In the taxable year of the trust during which the
unitrust period ends, the obligation of the Trustee to pay the unitrust amount shall terminate with the last regular
quarterly installment preceding thedeath of the Survivor Recipient.
.04Power of Appointment to Designate the Charitable Remainderman.
(1)Explanation. The trust instrument may grant a recipient a power of appointment to designate the charitable remainderman.
See Rev. Rul. 76–7, 1976–1 C.B. 179.
(2)Instructions for use. Replace paragraph 4, Distribution to Charity, of the sample trust with the following paragraph:
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal
and income of the trust (other than any amount due the Predeceasing Recipient and/or the Survivor Recipient under the
terms of this trust) to one or more charitable organizations described in §§ 170(c) and 2055(a) of the Code as [one of
the named permissible recipients] shall appoint and direct by specific reference to this power of appointment by inter
vivos or testamentary instrument. To the extent this power ofappointment is not effectively exercised, the principal and
2005–34 I.R.B.418August 22, 2005

income not effectively appointed shall be distributed to one or more organizations described in §§ 170(c) and 2055(a) of
the Code as the Trustee shall select, and in the proportions asthe Trustee shall decide, in theTrustee’s sole discretion.
If an organization fails to qualify as an organization described in §§ 170(c) and 2055(a) of the Code at the time when
any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the then principal and
income to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in
the proportions as the Trustee shall decide, in the Trustee’s sole discretion.
.05Net Income Method of Calculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage methodof calculating the unitrust amount in paragraph 1 of the
sample trust, a CRUT may use the net income method for calculating the unitrust amount. Under the net income method,
the unitrust amount is the lesser of a fixed percentage of the net fair market value of the trust assets valued annually or the
amount of trust income for that year. Section 664(d)(3)(A) and § 1.664–3(a)(1)(i)(b)(1). For purposes of determining the
amount of the charitable contribution, the remainder interest is computed on the basis that an amount equal to the fixed
percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller amount of trust
income may be the amount distributed. Section 664(e).
(2)Definition of trust income. For purposes of the methods described in § 664(d)(3), trust income generally means income
as defined under § 643(b) and the applicableregulations. Section 1.664–3(a)(1)(i)(b)(3). Even if permitted by applicable
state law, however, trust income of a CRUT that uses the net income method, the net income with make-up method, or a
combination of methods of determining the unitrust amount may not be determined by reference to a fixed percentage of
the net fair market value of the trust property. In addition, although certain proceeds from the sale or exchange of assets
must be allocated to principal and not to trust income, other such proceeds may be allocated to trust income pursuant to the
terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation
may be granted to the trustee under the terms of the governing instrument, but only to the extent that the applicable state
statute permits the trustee tomake adjustments between income and principalto treat beneficiaries impartially. Section
1.664–3(a)(1)(i)(b)(3). A definition of trust income that is consistent with these requirements may, but need not, be included
in the trust instrument.
(3)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient]andto
[permissible recipient] (hereinafter “the Recipients”) in equal sharesduring their joint lives, a unitrust amount equal
to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued asof the valuation date (hereinafter “the fixed percentage
amount described in (a) of paragraph 1”) or (b) the trust income for the taxable year as defined in § 643(b) of the Code
and the applicable regulations. Upon the death of one of the Recipients(hereinafter “the Predeceasing Recipient”),
the Trustee shall pay the entire unitrust amount to the survivor (hereinafter “the SurvivorRecipient”). The valuation
date is the first day of each taxable year of the trust. The first day of the unitrust period shall be the date of my death
and the last day of the unitrust period shall be the date ofthe Survivor Recipient’s death. The unitrust amount shall
be paid in equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for
a taxable year in excess of the unitrustamount shall be added to principal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such
a year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a)
of paragraph 1 to determine the unitrust amount payable for that year. Upon the death of the Predeceasing Recipient,
the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death of the Predeceasing
Recipient between the estate of the Predeceasing Recipient and the Survivor Recipient.
.06Net Income with Make-up Method ofCalculating the Unitrust Amount.
(1)Explanation. As an alternative to using the fixed percentage method of calculating the unitrust amount in paragraph 1 of
the sample trust, a CRUT may use the net income with make-upmethod for calculating the unitrust amount. Under the
net income with make-up method, the unitrust amount consists of two components: (i) the amount determined under the
net income method (as described in section 6.05 of this revenue procedure); and (ii) the amount of trust income that is in
excess of the fixed percentage amount for that year, but only to the extent that the aggregate of the unitrust amounts paid
to the recipients in prior years was less than the amounts that would have been paid to the recipients if the unitrust amount
August 22, 20054192005–34 I.R.B.

had been computed using the fixed percentage method. Section 664(d)(3)(B) and § 1.664–3(a)(1)(i)(b)(2). For purposes
of determining the amount of the charitable contribution, the remainder interest is computed on the basis that an amount
equal to the fixed percentage unitrust amount is to be distributed each year, without regard to the possibility that a smaller or
larger amount of trust income may be the amount distributed. Section 664(e). See section 6.05(2) of this revenue procedure
for rules relating to the definition of trust income.
(2)Instructions for use.
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace the first four sentences of paragraph 1, Payment of Unitrust Amount, of the sample trust with the following:
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [permissible recipient]andto
[permissible recipient] (hereinafter “the Recipients”) in equal sharesduring their joint lives, a unitrust amount equal
to the lesser of (a) a fixed percentage amount equal to [a number no less than 5 and no more than 50] percent of
the net fair market value of the assets of the trust valued asof the valuation date (hereinafter “the fixed percentage
amount described in (a) of paragraph 1”) or (b) the trust income for the taxable year as defined in § 643(b) of the
Code and the applicable regulations. The unitrust amount for a taxable year shall also include any amount of trust
income for the year that is in excess of [the fixed percentage amount determined under (a) of this paragraph for the
year], but only to the extent that the aggregate of the amounts paid to the Recipients in prior years was less than the
aggregate of the amounts determined for all prior years under (a) of this paragraph. Upon the death of one of the
Recipients (hereinafter “the Predeceasing Recipient”), the Trustee shall pay the entire unitrust amount to the survivor
(hereinafter “the Survivor Recipient”). The valuation date is the first day of each taxable year of the trust. The first
day of the unitrust period shall be the date of my death andthe last day of the unitrust period shall be the date of
the Survivor Recipient’s death. The unitrust amount shall be paid in equal quarterly installments at the end of each
calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be
addedtoprincipal.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount. For a short taxable year and for the taxable year during which the unitrust period
ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1. In such
a year, this prorated fixed percentage amount shall be usedin place of the fixed percentage amount described in (a)
of paragraph 1 to determine the unitrust amount payable for that year. Upon the death of the Predeceasing Recipient,
the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death of the Predeceasing
Recipient between the estate of the Predeceasing Recipient and the Survivor Recipient.
.07Combination of Methods for Calculating the Unitrust Amount.
(1)Explanation. The net income method (described in section 6.05 of this revenue procedure) or the net income with make-up
method (described in section 6.06 of this revenue procedure) may be combined with the fixed percentage method for cal-
culating the unitrust amount. Section 1.664–3(a)(1)(i)(c). More specifically, the governing instrument may provide for
payment of the unitrust amount not less often than annually using the net income or the net income with make-up method of
calculation, and then, in the years following a permissible triggering event (as described in § 1.664–3(a)(1)(i)(c)and(d)),
for payment of the unitrust amount using the fixed percentage method of calculation. To provide for a one-time conversion
from the net income or the net income with make-up method tothe fixed percentage method of calculation, the governing
instrument must provide that: (i) the change in method is triggeredonaspecificdateorbyasingle event whose occurrence
is not discretionary with, or within the control of, the trustees or any other persons; (ii)the change in method occurs at
the beginning of the taxable year that immediately follows the taxable year during which the permissible triggering event
occurs; and (iii) following the trust’s conversion to the fixed percentage method, the trust will pay at least annually to the
predeceasing recipient and/or the survivor recipient the amount described in § 1.664–3(a)(1)(i)(a) and no amount described
in § 1.664–3(a)(1)(i)(b). Section 1.664–3(a)(1)(i)(c). Thus, any make-up amount described in § 1.664–3(a)(1)(i)(b)(2)that
is not paid by the beginning of the taxable year immediately following the taxable year during which the permissible trig-
gering event occurs shall be forfeited by the predeceasing recipient and/or the survivor recipient and added to principal.
(2)Instructions for use to combine the net income and fixed percentage methods.To convert from the net income method for
calculating the unitrust amount to the fixed percentage method after a permissible triggering event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income method. In each taxable year of the trust during the unitrust period, the
Trustee shall pay to [permissible recipient]andto[permissible recipient] (hereinafter “the Recipients”) in equal shares
during their joint lives, a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [a number
2005–34 I.R.B.420August 22, 2005

no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued as of the
valuation date (hereinafter “the fixed percentage amount described in (a) of paragraph 1(i)”) or (b) the trust income
for the taxable year as defined in § 643(b) of the Code and the applicable regulations. Upon the death of one of the
Recipients (hereinafter “the Predeceasing Recipient”), the Trustee shall pay the entire unitrust amount to the survivor
(hereinafter “the Survivor Recipient”). The unitrust amount shall be paid in equal quarterly installments at the end of
each calendar quarter from income. Any income of the trustfor a taxable year in excess of the unitrust amount shall
be added to principal.
(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Regula-
tions] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately follows
the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable year of the
trust during the unitrust period, the Trustee shall pay to the Recipients in equal shares during their joint lives a unitrust
amount equal to [same percentage used in (a) of paragraph 1(i)] percent of the net fair market value of the trust assets
as of the valuation date, and, upon the death of the Predeceasing Recipient, the Trustee shall pay the entire unitrust
amount to the Survivor Recipient. Beginning on the effective date of the triggering event, the Trustee shall no longer
pay the amount equal to the lesser of (a) or (b) in paragraph 1(i). The unitrust amount shall be paid in equal quarterly
installments at the end of each calendar quarter from income and, to the extent income is not sufficient, from principal.
Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the date of the Survivor Recipient’s death. The valuation date is the first day of each taxable year of the trust.
If, for any year, the net fair market value of the trust assetsis incorrectly determined, then within a reasonable period
after the correct value is finally determined, the Trustee shall pay to the Predeceasing Recipient and/or the Survivor
Recipient (in the case of an undervaluation) or receive from the Predeceasing Recipient and/or the Survivor Recipient
(in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable
and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixedpercentage amount described in (a) of paragraph 1(i) to
determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
(iii)Proration of unitrust amount between Predeceasing Recipient and Survivor Recipient. Upon the death of the Prede-
ceasing Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death of
the Predeceasing Recipient between the estate of thePredeceasing Recipient andthe Survivor Recipient.
(3)Instructions for use to combine the net income with make-up and fixed percentage methods. To convert from the net income
with make-up method for calculating the unitrust amount to the fixed percentage method after a permissible triggering
event:
(a)Each and every time a reference to “§ 664(d)(2)” appears in the sample trust, replace it with a reference to “§ 664(d)(2)
and (d)(3).”
(b)Replace paragraph 1, Payment of Unitrust Amount, of the sample trust with the following paragraph:
PaymentofUnitrustAmount.
(i)Unitrust amount determined by net income with make-up method. In each taxable year of the trust during the unitrust
period the Trustee shall pay to [permissible recipient]andto[permissible recipient] (hereinafter “the Recipients”) in
equal shares during their joint lives, a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to
[a number no less than 5 and no more than 50] percent of the net fair market value of the assets of the trust valued
as of the valuation date (hereinafter “the fixed percentageamount described in (a) of paragraph 1(i)”) or (b) the trust
income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The unitrust amount
for a taxable year shall also include any amount of trust income for the year that is in excess of [the fixed percentage
amount determined under (a) of paragraph 1(i) for the year], but only to the extent that the aggregate of the amounts
paid to the Recipients in prior years was less than the aggregate of the amounts determined for all prior years under
(a) of paragraph 1(i). Upon the death of one of the Recipients (herein “the Predeceasing Recipient”),the Trustee shall
pay the entire unitrust amount to the survivor (herein “the Survivor Recipient”). The unitrust amount shall be paid in
equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable
year in excess of the unitrust amount shall be added to principal.
August 22, 20054212005–34 I.R.B.

(ii)Conversion to fixed percentage method of determining unitrust amount. Notwithstanding paragraph 1(i), upon the
occurrence of [permissible triggering event as described in § 1.664–3(a)(1)(i)(c) and (d) of the Income Tax Regula-
tions] (hereinafter “the triggering event”) and effective as of the first day of the taxable year that immediately follows
the triggering event (hereinafter “the effective date of the triggering event”), in each remaining taxable year of the
trust during the unitrust period, the Trustee shall pay to the Recipients in equal shares during their joint lives a unitrust
amount equal to [same percentage used in (a) of paragraph 1(i)] percent of the net fair market value of the trust assets
as of the valuation date and, upon the death of the Predeceasing Recipient, the Trustee shall pay the entire unitrust
amount to the Survivor Recipient. Beginning on the effective date of the triggering event, the Trustee shall no longer
pay the amount equal to the lesser of (a) or (b) in paragraph 1(i) and shall not pay any amount of trust income de-
scribed in the second sentence of paragraph 1(i). The unitrust amount shall be paid in equal quarterly installments at
the end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income
of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii)In general. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period
shall be the date of the Survivor Recipient’s death. The valuation date is the first day of each taxable year of the trust.
If, for any year, the net fair market value of the trust assetsis incorrectly determined, then within a reasonable period
after the correct value is finally determined, the Trustee shall pay to the Predeceasing Recipient and/or the Survivor
Recipient (in the case of an undervaluation) or receive from the Predeceasing Recipient and/or the Survivor Recipient
(in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable
and the unitrust amount(s) actually paid.
(c)Replace paragraph 3, Proration of Unitrust Amount, of the sample trust with the following paragraph:
Proration of Unitrust Amount.
(i)Proration in years preceding the effective date of triggering event. For a short taxable year before the effective date
of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall
prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated
fixed percentage amount shall be used in place of the fixedpercentage amount described in (a) of paragraph 1(i) to
determine the unitrust amount payable for that year.
(ii)Proration on and after effective date of triggering event. For a short taxable year beginning on or after the effective
date of the triggering event, which may include the taxableyear during which the unitrust period ends, the Trustee
shall prorate on a daily basis the unitrust amount described in paragraph 1(ii).
(iii)Proration of unitrust amount between Predeceasing Recipient and Survivor Recipient. Upon the death of the Prede-
ceasing Recipient, the Trustee shall prorate on a daily basis the next regular unitrust payment due after the death of
the Predeceasing Recipient between the estate of thePredeceasing Recipient andthe Survivor Recipient.
SECTION 7. EFFECT ON OTHER REVENUE PROCEDURES
Section 8 of Rev. Proc. 90–30 and section 9of Rev. Proc. 90–31 are superseded.
DRAFTING INFORMATION
The principal authors of this revenue procedure are Karlene M. Lesho and Stephanie N. Bland of the Office of Associate Chief
Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Karlene M. Lesho
or Stephanie N. Bland at (202) 622–7830 (not a toll-free call).
2005–34 I.R.B.422August 22, 2005

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
August 22, 2005i2005–34 I.R.B.

Numerical Finding List
1
Bulletins 2005–27 through 2005–34
Announcements:
2005-46, 2005-27 I.R.B.63
2005-47, 2005-28 I.R.B.71
2005-48, 2005-29 I.R.B.111
2005-49, 2005-29 I.R.B.119
2005-50, 2005-30 I.R.B.152
2005-51, 2005-32 I.R.B.283
2005-52, 2005-31 I.R.B.257
2005-53, 2005-31 I.R.B.258
2005-54, 2005-32 I.R.B.283
2005-55, 2005-33 I.R.B.317
2005-56, 2005-33 I.R.B.318
2005-57, 2005-33 I.R.B.318
2005-58, 2005-33 I.R.B.319
Notices:
2005-48, 2005-27 I.R.B.9
2005-49, 2005-27 I.R.B.14
2005-50, 2005-27 I.R.B.14
2005-51, 2005-28 I.R.B.74
2005-52, 2005-28 I.R.B.75
2005-53, 2005-32 I.R.B.263
2005-54, 2005-30 I.R.B.127
2005-55, 2005-32 I.R.B.265
2005-56, 2005-32 I.R.B.266
2005-57, 2005-32 I.R.B.267
2005-58, 2005-33 I.R.B.295
Proposed Regulations:
REG-130241-04, 2005-27 I.R.B.18
REG-138362-04, 2005-33 I.R.B.299
Revenue Procedures:
2005-35, 2005-28 I.R.B.76
2005-36, 2005-28 I.R.B.78
2005-37, 2005-28 I.R.B.79
2005-38, 2005-28 I.R.B.81
2005-39, 2005-28 I.R.B.82
2005-40, 2005-28 I.R.B.83
2005-41, 2005-29 I.R.B.90
2005-42, 2005-30 I.R.B.128
2005-43, 2005-29 I.R.B.107
2005-44, 2005-29 I.R.B.110
2005-45, 2005-30 I.R.B.141
2005-46, 2005-30 I.R.B.142
2005-47, 2005-32 I.R.B.269
2005-48, 2005-32 I.R.B.271
2005-49, 2005-31 I.R.B.165
2005-50, 2005-32 I.R.B.272
2005-51, 2005-33 I.R.B.296
2005-52, 2005-34 I.R.B.326
2005-53, 2005-34 I.R.B.339
Revenue Procedures— Continued:
2005-54, 2005-34 I.R.B.353
2005-55, 2005-34 I.R.B.367
2005-56, 2005-34 I.R.B.383
2005-57, 2005-34 I.R.B.392
2005-58, 2005-34 I.R.B.402
2005-59, 2005-34 I.R.B.412
Revenue Rulings:
2005-38, 2005-27 I.R.B.6
2005-39, 2005-27 I.R.B.1
2005-40, 2005-27 I.R.B.4
2005-41, 2005-28 I.R.B.69
2005-42, 2005-28 I.R.B.67
2005-43, 2005-29 I.R.B.88
2005-44, 2005-29 I.R.B.87
2005-45, 2005-30 I.R.B.123
2005-46, 2005-30 I.R.B.120
2005-47, 2005-32 I.R.B.261
2005-48, 2005-32 I.R.B.259
2005-49, 2005-30 I.R.B.125
2005-50, 2005-30 I.R.B.124
2005-51, 2005-31 I.R.B.163
2005-54, 2005-33 I.R.B.289
2005-55, 2005-33 I.R.B.284
Tax Conventions:
2005-47, 2005-28 I.R.B.71
Treasury Decisions:
9208, 2005-31 I.R.B.157
9209, 2005-31 I.R.B.153
9210, 2005-33 I.R.B.290
9211, 2005-33 I.R.B.287
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2005–1 through 2005–26 is in Internal Revenue Bulletin
2005–26, dated June 27, 2005.
2005–34 I.R.B.iiAugust 22, 2005

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2005–27 through 2005–34
Notices:
2005-51
Modified and superseded by
Notice 2005-57, 2005-32 I.R.B.267
Proposed Regulations:
REG-142686-01
Withdrawn by
Ann. 2005-55, 2005-33 I.R.B.317
REG-100420-03
Corrected by
Ann. 2005-57, 2005-33 I.R.B.318
REG-102144-04
Corrected by
Ann. 2005-56, 2005-33 I.R.B.318
Revenue Procedures:
64-54
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
66-33
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
69-13
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
70-8
Modified by
Rev. Proc. 2005-46, 2005-30 I.R.B.142
71-1
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
72-22
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
87-8
Obsoleted by
Rev. Proc. 2005-44, 2005-29 I.R.B.110
87-9
Obsoleted by
Rev. Proc. 2005-44, 2005-29 I.R.B.110
89-20
Superseded by
Rev. Proc. 2005-52, 2005-34 I.R.B.326
90–11
Modified by
Rev. Proc. 2005-40, 2005-28 I.R.B.83
Revenue Procedures— Continued:
90-30
Section4supersededby
Rev. Proc. 2005-54, 2005-34 I.R.B.353
Section5supersededby
Rev. Proc. 2005-55, 2005-34 I.R.B.367
Section6supersededby
Rev. Proc. 2005-56, 2005-34 I.R.B.383
Section7supersededby
Rev. Proc. 2005-58, 2005-34 I.R.B.402
Section8supersededby
Rev. Proc. 2005-59, 2005-34 I.R.B.412
90-31
Section4supersededby
Rev. Proc. 2005-52, 2005-34 I.R.B.326
Section5supersededby
Rev. Proc. 2005-54, 2005-34 I.R.B.353
Section6supersededby
Rev. Proc. 2005-55, 2005-34 I.R.B.367
Section7supersededby
Rev. Proc. 2005-56, 2005-34 I.R.B.383
Section8supersededby
Rev. Proc. 2005-58, 2005-34 I.R.B.402
Section9supersededby
Rev. Proc. 2005-59, 2005-34 I.R.B.412
93-22
Obsoleted by
Rev. Proc. 2005-44, 2005-29 I.R.B.110
98-18
Obsoleted by
Rev. Proc. 2005-45, 2005-30 I.R.B.141
2000-49
Superseded by
Rev. Proc. 2005-41, 2005-29 I.R.B.90
2001-16
Superseded by
Rev. Proc. 2005-42, 2005-30 I.R.B.128
2002-9
Modified and amplified by
Rev. Rul. 2005-42, 2005-28 I.R.B.67
Rev. Proc. 2005-35, 2005-28 I.R.B.76
Rev. Proc. 2005-43, 2005-29 I.R.B.107
Rev. Proc. 2005-47, 2005-32 I.R.B.269
2004-50
Superseded by
Rev. Proc. 2005-49, 2005-31 I.R.B.165
Revenue Rulings:
65-109
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
68-549
Obsoleted by
Rev. Rul. 2005-43, 2005-29 I.R.B.88
Revenue Rulings— Continued:
82-29
Modified and clarified by
Rev. Proc. 2005-39, 2005-28 I.R.B.82
2005-41
Corrected by
Ann. 2005-50, 2005-30 I.R.B.152
Treasury Decisions:
9186
Corrected by
Ann. 2005-53, 2005-31 I.R.B.258
9206
Corrected by
Ann. 2005-49, 2005-29 I.R.B.119
9207
Corrected by
Ann. 2005-52, 2005-31 I.R.B.257
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2005–1 through 2005–26 is in Internal Revenue Bulletin 2005–26, dated June 27, 2005.
August 22, 2005iii2005–34 I.R.B.
*U.S. Government Printing Office: 2005—310–365/20019