DEFINITION of 'Conduit IRA'

A traditional IRA that holds only assets that were distributed from a qualified plan. Typically, the intention of using this type of plan is to store assets until they can be rolled into a new employer's qualified plan.

BREAKING DOWN 'Conduit IRA'

Should any other assets be commingled with the assets in a conduit IRA, the IRA will lose its conduit status and the assets are no longer eligible for capital gains and forward averaging tax treatments. There is no limit on the contributions transferred to a conduit IRA.

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RELATED FAQS
  1. How do I use a conduit IRA?

    An Individual Retirement Account (IRA) is an account that allows individuals to invest a certain amount of pretax income ... Read Answer >>
  2. Can I hold multiple IRAs?

    IRAs are investments made to plan for retirement, which offer certain tax advantages, depending on the type, and often matching ... Read Answer >>
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