Pooled Income Fund


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Pooled Income Fund

A mutual fund comprising of donated securities and/or cash, the proceeds of which go to charity and donors. One donates securities and cash to create a pooled income fund, which is then invested as if it were a regular mutual fund, which pays dividends to donors each quarter in proportion to the amount donated as a percentage of the whole fund. When a donor dies, what remains of his/her donation as a percentage of the total fund is given to a charity. Usually charities administer pooled income funds, and the remaining donation goes to their own charitable operations. All cash and securities donated to pooled income funds qualify as charitable gifts for tax purposes; importantly, securities so donated are exempt from capital gains tax.
References in periodicals archive ?
Pooled income funds (PIFs) are the least common split-interest trust, accounting for less than 2 percent of all Forms 5227 filed in 2012.
(3) Pooled income funds providing income from co-mingled investments and charitable gift annuities providing income as a general obligation of the charity--see pages 337 and 340.
A pooled income fund is a trust maintained by the charity into which each donor transfers property and from which each named beneficiary receives an income interest.
(34.) In determining the amount of a charitable contribution to a pooled income fund for purpose of determining the allowable deduction, the value of the remainder interest is generally determined on the basis of the highest rate of return by the fund for any of the three taxable years immediately preceding the taxable year of the fund in which the transfer is made.
The assets within the pooled income fund are managed by the particular charity that established the fund.
The university maintains a pooled income fund that is producing an annual return of 6%.
However, unlike a charitable remainder trust, a pooled income fund is not a tax-exempt entity.
An alternative plan is the Pooled Income Fund. This fund allows you to pool your donations or investments with other growth-oriented investors.
The sample was stratified by the type of the trust (charitable remainder annuity trust, charitable remainder unitrust, charitable lead trust, or pooled income fund) and the reported end-of-year book value of total assets.
A donor who wishes to avoid set-up and administration expenses may prefer to contribute to a pooled income fund (see Q 1329, Q 1332), or a donor advised fund (see Q 1333).
The rollover had to be made directly in a trustee-to-charity transfer (e.g., it could not have been made to a charitable remainder trust, lead trust, gift annuity, or pooled income fund).
As an alternative solution, many advisors currently use a vehicle that was created by the SEC in 1969: the Pooled Income Fund (PIF).