Conduit Theory

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Dictionary Says

Definition of 'Conduit Theory'

A theory stating that an investment firm that passes all capital gains, interest and dividends on to its customers/shareholders shouldn't be levied at the corporate level like most regular companies. An example of such a company is a real estate investment trust or a mutual fund company.
Investopedia Says

Investopedia explains 'Conduit Theory'

The firm passes income (without taxing itself) directly to the investors who are then taxed as individuals. Conduit theory suggests that investors in these types of firms should only be taxed once on the same income, unlike in regular companies, where investors are taxed twice (at the corporate and then individual level).
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'Conduit Theory'

  • Series 7 Study Guide - Packaged Securities - Mutual Fund ...

    http://www.investopedia.com/exam-guide/series-7/packaged-securities/mutual-fund-distributions.asp
    This section deals with the distribution form mutual funds in the form of dividends,
    capital gains, their tax treatment and the Conduit theory. ...

  • How do I use a conduit IRA?

    http://www.investopedia.com/ask/answers/09/how-use-conduit-ira.asp
    ... More Categories; Bonds; Economics; Markets; Taxes; Financial Careers; Financial
    Theory; Investing; ... Feedback Feedback. How do I use a conduit IRA? An ...

  • Series 7 Study Guide - Packaged Securities - Real Estate ...

    http://www.investopedia.com/exam-guide/series-7/packaged-securities/real-estate-investment-trust.asp
    ... Also like mutual funds, REITs are pass-through entities which, in congruence with
    conduit theory, distribute the majority of income cash flows to investors ...

  • Series 7 Study Guide - Portfolio Management - Mutual Fund Analysis ...

    http://www.investopedia.com/exam-guide/series-7/portfolio-management/mutual-fund-analysis.asp
    ... Eligibility for conduit theory application on distributions: This is a factor because
    not all investment companies qualify for this treatment, and their ...

  • Wealth-Building IRA Rollovers

    http://www.investopedia.com/articles/retirement/09/ira-qualified-plan-rollover.asp
    ... The main types of rollovers are the conduit IRA, the direct rollover, the indirect
    rollover, the spousal beneficiary rollover, and the non-spouse beneficiary ...

  • Asset-Backed Commercial Paper Carries High Risk

    http://www.investopedia.com/articles/bonds/08/commercial-paper.asp
    ... Conduits A conduit is a bankruptcy remote special purpose vehicle or entity, which
    means that it is a separate business entity and is not rolled up into the ...

  • Combining Your Plan Assets? Not So Fast!

    http://www.investopedia.com/articles/retirement/03/051403.asp
    ... were allowed to roll over an IRA to a qualified-plan account, only if those IRA
    assets originated from a qualified plan and were maintained in a conduit IRA. ...

  • What should I look for when choosing a forex trading platform?

    http://www.investopedia.com/ask/answers/forex/currency-trading-platforms.asp
    ... trading platform? A trading platform is a piece of software that acts as
    a conduit for information between a trader and a broker. ...

  • Pipelines Provide Portfolio Energy

    http://stocks.investopedia.com/stock-analysis/2009/Pipelines-Provide-Portfolio-Energy-TRP-ENB-TPP-MMP-NS0406.aspx
    ... Enbridge Offers A Conduit Network Another Canadian pipeline superstar, Enbridge
    (NYSE:ENB), operates a conduit network that transports nearly 2.2 million ...

  • SearsÂ’ Big Move

    http://stocks.investopedia.com/stock-analysis/2011/Sears-Big-Move-SHLD-COST-JCP-M-JWN1005.aspx
    ... Instead of Sears being a cornerstone and cash conduit of a giant holding company,
    Sears remained, well, a retail chain, and not a very good one at that. ...

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