Craft Pod uses a collect-and-reinvest strategy to keep your portfolio well diversified while deferring taxes whenever possible, directly advancing the Pod’s core objectives.
Dividends and other investment income
When a company whose shares sit inside the Pod pays a cash dividend, or when the Pod earns charter profit or interest, that cash first shows up as income of the fund. The Manager usually reinvests the money in additional securities or holds it briefly to meet liquidity needs, instead of sending it out to investors. This approach helps the Pod stay above the twenty per cent threshold of non readily marketable assets needed for Section 721 treatment. If the cash balance grows beyond immediate needs, the Manager can declare a distribution, but the governing documents say that ordinary practice is to keep earnings working inside the Pod.
Capital gains
The Pod is organized to reduce realized gains. Contributed securities are meant to be held long term, and selling is avoided unless a major corporate action or a strategic re-balancing makes it necessary. If the Pod must sell a position that carries built in gain, Section 704(c) rules apply. The gain is specially allocated back to the participant who contributed the shares, so other participants are not taxed on appreciation that never belonged to them.
Tax reporting
Participants in our funds receive annual tax documents via the Schedule K-1 form, which reports relevant details for tax filing.