Rev. Rul. 85-69

1985-1 C.B. 183, 1985-22 I.R.B. 6.

POOLED INCOME FUND; QUALIFIED DONOR

Published: June 3, 1985

Section 642.-Special Rules for Credits and Deductions, 26 CFR 1.642(c)-5: Definition of pooled income fund.

  Pooled income fund; qualified donor. A donor to a pooled income fund may be a person other than an individual.

ISSUE

  May donors to pooled income funds under section 642(c)(5) of the Internal Revenue Code include persons other than individuals?

LAW AND ANALYSIS

  Section 642(c)(5) of the Code provides, in part, that a pooled income fund is a trust to which each donor transfers property, contributing an irrevocable remainder interest in such property to or for the use of an organization described in section 170(b)(1)(A) (other than in clauses (vii) or (viii)), and retaining an income interest for the life of one or more beneficiaries (living at the time of such transfer).

  Section 1.642(c)-5(a)(5)(ii) of the Income Tax Regulations defines the term  'donor' to include a decedent who makes a testamentary transfer of property to a pooled income fund.

  Section 1.642(c)-5(b)(2) of the regulations provides that each donor must retain for himself for life an income interest in the property transferred to such fund, or create an income interest in such property for the life of one or more beneficiaries, each of whom must be living at the time of transfer of the property to the fund by the donor. The donor may retain the power exercisable only by will to revoke or terminate the income interest of any designated beneficiary other than the public charity.

  There is nothing in the Code or regulations that specifically limits the scope of the term 'donor'. The only limitation in the case of a donor who is not an individual is (1) an inability to retain an income interest in favor of the donor and (2) an inability to retain a power exercisable only by will to revoke or terminate that income interest of a designated beneficiary. Neither of these limitations is such that it should preclude a person other than an individual from being a donor to a pooled income fund.

HOLDING

  A person other than an individual, such as a corporation, may be a donor to a pooled income fund (as defined in section 642(c)(5) of the Code).

Rev. Rul. 85-69, 1985-1 C.B. 183, 1985-22 I.R.B. 6.