Pooled Income Fund

AAA

DEFINITION of 'Pooled Income Fund'

A type of mutual fund comprised of gifts that are pooled and invested together. Income from the fund is distributed to both the fund's participants and named beneficiaries according to their share of the fund. If you are a donor to the fund, you and the other income recipients you choose receive quarterly payments for life, and upon your death the value of the assets will be transferred to the beneficiaries.

INVESTOPEDIA EXPLAINS 'Pooled Income Fund'

Basically, a pooled income fund allows you to do three things: 1) ensure a perpetual income, 2) claim a current tax deduction and 3) make a future gift to charity.

For example, say you own stock with a value of $50,000. Then you donate the stock to the pooled income fund to eventually fund scholarships for underprivileged students and reserve for yourself an income interest for life. In the transfer of stock to the fund, you do not recognize a capital gain on the appreciated value since original purchase, so you avoid capital gains tax. You will also receive a charitable deduction for the year you enter into the pool, lowering your taxes.

RELATED TERMS
  1. Sin Stock

    A stock of a company that is either involved in or associated ...
  2. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Commingled Fund

    A fund consisting of assets from several accounts that are blended ...
  4. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  5. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  2. Investing

    Active Funds: Getting What You Are Paying For?

    Fund investing could have hidden costs that can potentially make a big impact on your final return, particularly over the long-term.
  3. Brokers

    OptionsXpress Vs. OptionsHouse: Which One To Pick?

    OptionsXpress and OptionsBroker -- each offers a price mix and set of services suitable for certain investors based on their trade approach and priorities.
  4. Investing Basics

    This Investment Strategy Could Be Your key To Success

    Goal-based investing seems like an obvious tactic. But many investors have only a vague idea what their goals are, much less how to achieve them.
  5. Economics

    Gary Gordon Positions Your Portfolio For 2015

    Seeking Alpha, the popular financial web portal, interviews Gary Gordon for its Positioning for 2015 series. Here is a transcript of that exchange.
  6. Professionals

    A Look At Pimco's Total Return Fund Post-Gross

    Pimco has stabilized its Total Return fund, but its returns are still shaky and its sales load is still a fat one.
  7. Professionals

    10 Equity Mutual Fund Bargains

    10 equity mutual funds bargains for any investor or financial advisor.
  8. Chart Advisor

    A Total Stock Market ETF For Any Portfolio

    Utilizing index funds and ETFs, such as Vanguard's VTI, is one of the best ways for the average investor to track the broad markets and minimize fees.
  9. Mutual Funds & ETFs

    Destination Africa: These Funds Offer Easy Access

    Africa's economic growth and growing stability has gotten the attention of adventurous investors. What kind of ETF or mutual fund options are available?
  10. Investing Basics

    How Does Janus's Fund Lineup Look Now?

    With the addition of 'Bond King' Bill Gross, Janus is a changed firm. Here's what its fund lineup looks like now.

You May Also Like

Hot Definitions
  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  2. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  3. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  4. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
Trading Center