Qualifying Investment


DEFINITION of 'Qualifying Investment'

An investment purchased with pretax income. Money invested in a qualifying investment trust, annuity or plan is exempt from income taxes until it is withdrawn. These sorts of investments are tax-deferred, because the money invested in them is taxed at withdrawal only.

BREAKING DOWN 'Qualifying Investment'

Some types of investments that may qualify for tax-deferred status are investment plans, annuities, stocks, bonds, IRAs, RRSPs and certain types of trusts.

  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  3. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  4. Tax Deferred

    Investment earnings such as interest, dividends or capital gains ...
  5. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  6. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
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  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>
  3. What are the risks of rolling my 401(k) into an annuity?

    Though the appeal of having guaranteed income after retirement is undeniable, there are actually a number of risks to consider ... Read Full Answer >>
  4. How do I get out of my annuity and transfer to a new one?

    If you decide your current annuity is not for you, there is nothing stopping you from transferring your investment to a new ... Read Full Answer >>
  5. What are the biggest disadvantages of annuities?

    Annuities can sound enticing when pitched by a salesperson who, not coincidentally, makes huge commissions selling them. ... Read Full Answer >>
  6. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>

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