The Tax Law of Charitable Giving, 5th Edition

Chapter ThirteenPooled Income Funds

1. § 13.1 Definitions
2. § 13.2 Qualifying Pooled Income Funds
   1. (a) Remainder Interests
   2. (b) Life Income Interests
   3. (c) Commingling
   4. (d) Prohibition as to Exempt Securities
   5. (e) Maintenance
   6. (f) Prohibitions as to Trustees
   7. (g) Income of Beneficiaries
   8. (h) Termination of Life Income Interest
3. § 13.3 Allocation of Income
   1. (a) Units of Participation
   2. (b) Partial Allocation of Income to Charity
4. § 13.4 Recognition of Gain or Loss on Transfers
5. § 13.5 Mandatory Provisions
6. § 13.6 Private Foundation Rules
7. § 13.7 Pass-Through of Depreciation
8. § 13.8 Tax Status of Fund and Beneficiaries
9. § 13.9 Multiorganization Pooled Income Funds
   1. (a) National Organizations with Affiliates
   2. (b) Pooled Income Funds of Community Trusts
   3. (c) Other Circumstances
10. § 13.10 Comparison with Charitable Remainder Trusts
11. § 13.11 Charitable Contribution Deduction

The federal tax law provides for a form of planned giving that utilizes a split-interest trust called a pooled income fund.¹ Basically, a pooled income fund is a vehicle by which money or property is split into two types of interests: one or more income interests and one or more remainder interests. The remainder interest usually is destined for one charitable organization, while the income interests are retained by or created for noncharitable beneficiaries.² In the normal course of events, the gift of the remainder interest gives rise to a federal tax deduction.³ This chapter focuses on the income tax deduction; the use of pooled ...