A pooled income fund is an irrevocable trust established and maintained by a public charity to which many donors can make contributions. Generally, it works as follows:
" Contributions received from individual donors are commingled for investment purposes.
" Each year, the donor (or the donor's designated income beneficiary) receives a distribution in an amount equal to the donor's pro rata share of the fund's net investment income.
" At the death of the income beneficiary, the portion of the fund attributable to the donor's gift is severed from the fund and distributed to a charity or charities of the donor's choice.
In the year of contribution, the donor may be entitled to an income tax charitable deduction.
Contributions are treated as gifts to a public charity for purposes of the income tax deductibility limitations.
The pooled income fund may accept appreciated assets from a donor and sell the appreciated property without the donor incurring immediate recognition of capital gains. If the property is encumbered by debt, other rules apply. The gift to a pooled income fund qualifies for the charitable gift and estate tax deduction. However, gift or estate tax may be incurred if the income interest is payable to someone other than the donor or the donor's spouse.
The New Mexico Pooled Income Fund with Declaration of Trust by Charitable Organization is a unique financial instrument designed to support charitable causes while providing income for the donors. This fund operates as a trust, allowing multiple individuals to contribute and pool their assets together for investment purposes. Let’s explore the key features and types of New Mexico Pooled Income Fund that exist: 1. Charitable Purpose: The New Mexico Pooled Income Fund solely serves charitable organizations that aim to bring positive change in various areas such as education, research, healthcare, poverty alleviation, environmental conservation, and more. It offers a way for donors to make a lasting impact on these causes. 2. Trust Structure: The Pooled Income Fund operates through a Declaration of Trust, which outlines all the terms and conditions of the fund. This legal framework ensures transparency, accountability, and adherence to the objectives of the fund. 3. Donor Contributions: Individuals contribute their assets, such as cash, securities, real estate, or even artwork, to the fund. These contributions are irrevocable, meaning they cannot be taken aback by the donor once transferred to the fund. 4. Income Generation: The fund's assets are invested in a diversified portfolio managed by professional investment managers. The generated income, consisting of dividends, interests, and capital gains, is distributed among the donors and charitable organizations based on their proportional shares. 5. Tax Benefits: Donors can enjoy significant tax advantages by contributing to the New Mexico Pooled Income Fund. They may receive an immediate income tax deduction based on the fair market value of their contribution, along with potential capital gains tax savings and the avoidance of estate taxes. 6. Life Income Stream: Donors receive a beneficial interest in the fund and are entitled to receive regular income payments throughout their lifetime. This feature provides financial security for donors while allowing them to support charitable endeavors that align with their values. Types of New Mexico Pooled Income Funds: 1. General Pooled Income Fund: This type of fund accepts contributions from a variety of donors, accommodating individuals with different charitable preferences and investment goals. 2. Specific Cause Pooled Income Fund: Some Pooled Income Funds may focus on specific causes, such as education, medical research, or environmental conservation. These funds attract donors passionate about a particular cause, ensuring their contributions are targeted towards their chosen field. The New Mexico Pooled Income Fund with Declaration of Trust by Charitable Organization acts as a win-win solution for individuals seeking to make a meaningful impact on charitable causes while still receiving income from their assets. By pooling resources, these funds have the potential to support a wide range of charitable organizations, promoting positive change in New Mexico and beyond.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
