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 Money invested in a qualifying investment trust, annuity or plan is exempt from income taxes until it is withdrawn.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. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  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. How liquid are variable annuities?

    Variable deferred annuities and variable immediate annuities are not considered liquid. Variable deferred annuities carry ... Read Full Answer >>
  2. Do variable annuities have RMDs?

    Variable annuities are not subject to required minimum distributions (RMDs) unless they are held in qualified plans, such ... Read Full Answer >>
  3. Are Canadian Pension Plans inflation-protected?

    The Canada Pension Plan protects pension holdings against inflation and adjusts its annual rates for inflation. The Canada ... Read Full Answer >>
  4. Can variable annuities be rolled into an IRA?

    Variable annuities are often found in government or nonprofit employer retirement plans such as 403(b) or 457(b) plans. With ... Read Full Answer >>
  5. How do I calculate the future value of an annuity?

    When planning for retirement, it is important to have a good idea of how much income you can rely on each year. There are ... Read Full Answer >>
  6. Are variable annuities protected from creditors?

    Whether your variable annuity is protected from creditors depends on the state in which you live. About three-quarters of ... Read Full Answer >>

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