Contents
Contents Contents
POOLED INCOME FUNDSincome interest in its favor (since it lacks a natural life), nor can it retain a powerexercisable only by will to revoke or terminate the income interest of a designatedbeneficiary.The measuring period of an income interest for an income beneficiary of apooled income fund must be the life of the beneficiary. That is, an individualbeneficiary of an income interest may not receive an income interest when theduration of the enjoyment of the income interest is measured by the lifetime ofanother individual. 22 This is the case even when the other individual is also abeneficiary of an income interest established by the same gift. A provision in thegoverning instrument of a pooled income fund authorizing the creation of thistype of an interest would prevent the fund from qualifying as a pooled incomefund. 23The donor may retain the power exercisable only by will to revoke or terminatethe income interest of any designated beneficiary other than the publiccharity. The governing instrument must specify at the time of the transfer theparticular beneficiary or beneficiaries to whom the income is payable, and theshare of income distributable to each person so specified. 24The public charity to or for the use of which the remainder interest is contributedmay also be designated one of the beneficiaries of an income interest.The donor need not retain or create a life interest in all of the income from theproperty transferred to the fund, provided that any income not payable underthe terms of the governing instrument to an income beneficiary is contributed to,and within the tax year in which it is received is paid to, the same public charityto or for the use of which the remainder interest is contributed. A charitable contributiondeduction is not, however, allowed to the donor for the value of theincome interest of the public charity or for the amount of any such income paidto the organization. 25(c) ComminglingThe property transferred to a pooled income fund by each donor must be commingledwith, and invested or reinvested with, other property transferred to thefund by other donors in satisfaction of the above requirements. 26 For this reason,property contributed to charity by means of a pooled income fund generally isconfined to cash and publicly traded securities. The governing instrument of thepooled income fund must contain a provision reflecting this requirement. 27The public charity to or for the use of which the remainder interest is contributedmay maintain 28 more than one pooled income fund, provided that eachfund is maintained by the organization and is not a device to permit a group ofdonors to create a fund that may be subject to their manipulation. 2922 Rev. Rul. 79-81, 1979-1 C.B. 220.23 Id.24 Reg. § 1.642(c)-5(b)(2).25 Id.26 IRC § 642(c)(5)(B); Reg. § 1.642(c)-5(b)(3).27 Reg. § 1.642(c)-5(b)(3).28 See § 13.2(e).29 Reg. § 1.642(c)-5(b)(3). 480
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- Page 1008: POOLED INCOME FUNDSA national organ
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- Page 1016: POOLED INCOME FUNDSEXAMPLE 13.2On J
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- Page 1028: POOLED INCOME FUNDScontributed” a
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- Page 1040: CHARITABLE GIFT ANNUITIESthe person
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POOLED INCOME FUNDSincome interest in its favor (since it lacks a natural life), nor can it retain a powerexercisable only by will to revoke or terminate the income interest of a designatedbeneficiary.The measuring period of an income interest for an income beneficiary of apooled income fund must be the life of the beneficiary. That is, an individualbeneficiary of an income interest may not receive an income interest when theduration of the enjoyment of the income interest is measured by the lifetime ofanother individual. 22 This is the case even when the other individual is also abeneficiary of an income interest established by the same gift. A provision in thegoverning instrument of a pooled income fund authorizing the creation of thistype of an interest would prevent the fund from qualifying as a pooled incomefund. 23The donor may retain the power exercisable only by will to revoke or terminatethe income interest of any designated beneficiary other than the publiccharity. The governing instrument must specify at the time of the transfer theparticular beneficiary or beneficiaries to whom the income is payable, and theshare of income distributable to each person so specified. 24The public charity to or for the use of which the remainder interest is contributedmay also be designated one of the beneficiaries of an income interest.The donor need not retain or create a life interest in all of the income from theproperty transferred to the fund, provided that any income not payable underthe terms of the governing instrument to an income beneficiary is contributed to,and within the tax year in which it is received is paid to, the same public charityto or for the use of which the remainder interest is contributed. A charitable contributiondeduction is not, however, allowed to the donor for the value of theincome interest of the public charity or for the amount of any such income paidto the organization. 25(c) ComminglingThe property transferred to a pooled income fund by each donor must be commingledwith, and invested or reinvested with, other property transferred to thefund by other donors in satisfaction of the above requirements. 26 For this reason,property contributed to charity by means of a pooled income fund generally isconfined to cash and publicly traded securities. The governing instrument of thepooled income fund must contain a provision reflecting this requirement. 27The public charity to or for the use of which the remainder interest is contributedmay maintain 28 more than one pooled income fund, provided that eachfund is maintained by the organization and is not a device to permit a group ofdonors to create a fund that may be subject to their manipulation. 2922 Rev. Rul. 79-81, 1979-1 C.B. 220.23 Id.24 Reg. § 1.642(c)-5(b)(2).25 Id.26 IRC § 642(c)(5)(B); Reg. § 1.642(c)-5(b)(3).27 Reg. § 1.642(c)-5(b)(3).28 See § 13.2(e).29 Reg. § 1.642(c)-5(b)(3). 480