PIF Tax Form Calculations Explained
The tax information presented in the reports and files available in the Reports tab under PIFs - Tax Reporting is driven off of data entered in the Fund Income Data tab under PIFs - Tax Reporting, as well as the payments made to each participant during the selected tax year.
Pooled income fund tax calculation steps
1) Compute the total of all Gross Amounts recorded in the Check Schedules of all fund beneficiaries with Check Dates during the tax year.
2) For each fund beneficiary who has check rows for one or more gifts that were assigned to the fund during the tax year, compute the total of all Gross Amounts with Check Dates during the tax year.
3) For each fund beneficiary, divide the beneficiary's total gross payments determined in step (2) by the total gross payments made by the fund determined in step (1). The result is the fraction of each income source recorded in the Fund Income Data tab that will be allocated to the beneficiary.
4) For each fund beneficiary, multiply each income source recorded in the Fund Income Data tab by the fraction determined in step (3). The resulting amounts are the individual taxation items that will be included in any of the reports and files available in the Reports tab under PIFs - Tax Reporting.
Sample calculation
Assume a fund has three participants: Joe and Jane Smith are both active beneficiaries of a gift they purchased 100 units several years ago. Fred Jones is the sole active beneficiary of a gift that purchased 50 units on 6/1/2003.
The Fund Income Data entries for the fund for 2003 are:
|
Dividends Excluding US Interest Reported as Dividends |
$1,000.00 |
|
US Interest Reported as Dividends |
$500.00 |
|
Corporate Interest |
$900.00 |
|
US Interest |
$1,100.00 |
|
MA Bank Interest |
$0.00 |
|
Other Income Subject to State and US Tax |
$0.00 |
|
Other Income Subject to US Tax Only |
$0.00 |
|
Foreign Tax Paid |
$0.00 |
|
Adjustments |
$100.00 |
|
Total |
$3,600.00 |
1) The fund distributed a total of $3,600.00 in 2003
2) The fund beneficiaries in 2003 received the following amounts
Joe Smith received $1,540.93
Jane Smith received $1,540.93
Fred Jones received $518.14
3) The fraction of total fund distributions received by each beneficiary was:
Joe Smith = $1,540.93 / $3,600.00 = .4280
Jane Smith = $1,540.93 / $3,600.00 = .4280
Fred Jones = $518.14 / $3,600.00 = .1440
4) Character of each beneficiary's income for tax purposes is:
Joe Smith and Jane Smith (.4280 x the fund total for each item)
| Dividends Excluding US Interest Reported as Dividends |
$428.00 |
| US Interest Reported as Dividends |
$214.00 |
| Corporate Interest |
$385.20 |
| US Interest |
$470.80 |
| MA Bank Interest |
$0.00 |
| Other Income Subject to State and US Tax |
$0.00 |
| Other Income Subject to US Tax Only |
$0.00 |
| Foreign Tax Paid |
$0.00 |
| Adjustments |
$42.80 |
Fred Jones (.1440 x the fund total for each item)
| Dividends Excluding US Interest Reported as Dividends |
$144.00 |
| US Interest Reported as Dividends |
$72.00 |
| Corporate Interest |
$129.60 |
| US Interest |
$158.40 |
| MA Bank Interest |
$0.00 |
| Other Income Subject to State and US Tax |
$0.00 |
| Other Income Subject to US Tax Only |
$0.00 |
| Foreign Tax Paid |
$0.00 |
| Adjustments |
$14.40 |