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 Money invested in a qualifying investment trust, annuity or plan is exempt from income taxes until it is withdrawn.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

RELATED TERMS
  1. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  2. Annuity

    A financial product that pays out a fixed stream of payments ...
  3. Tax Deferred

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

    An investing tool used by individuals to earn and earmark funds ...
  5. Tax Exempt

    To be free from, or not subject to, taxation by regulators or ...
  6. Non-Qualifying Investment

    An investment that does not qualify for any level of tax-deferred ...
Related Articles
  1. Taxes

    Tips For Moving Retirement Plan Assets

    Moving assets is common when changing jobs or retiring, but you have to do this carefully to avoid penalties.
  2. Bonds & Fixed Income

    Explaining Types Of Fixed Annuities

    Learn about this popular retirement tool, its pros and cons and how annuities work to create a guaranteed regular stream of retirement income.
  3. Retirement

    Tough Times: Should You Dip Into Your Qualified Plan?

    401(k)s, pensions and profit-sharing plans can be a source of cash, but there are consequences to this option.
  4. Taxes

    Learn about eligibility requirements, contributions and distribution rules for these retirement plans.
  5. Retirement

    The Best Robo-Advisors for Beginner Investors

    There are a handful of robo-advisors that may be a good fit if you're just starting out. Here's a peek at one with no fees and no minimum investment.
  6. Investing Basics

    Why the Fiduciary Rule is Good for All Investors

    The new fiduciary standard should help lower what middle- and lower-income investors pay, on average, to brokers for retirement planning advice.
  7. Financial Advisor Technology

    This Annuity Robo Wants to Transform the Market

    Annuities picked and sold without the intervention of an insurance agent? Here's a website that's trying to be the robo-advisor of the annuity world.
  8. Investing Basics

    DIY Annuities: What You Need to Know

    Annuities are attractive because they can give you a stream of income, but they can be tricky to buy.
  9. Investing News

    How the New Fiduciary Rule Will Impact Investors

    The DOL's new fiduciary rule is now in effect. Here are a few areas where individual investors, including clients and prospects, might notice some change.
  10. Investing Basics

    Six Things Bad Financial Advisors Do

    So you've gone to the trouble and expense of hiring a financial advisor. Here's how to decide whether they're doing you right or wrong.
RELATED FAQS
  1. If I am no longer employed, can I roll over a 403(b) plan into an IRA?

    Now that you are no longer working with the (former) employer that established your 403(b) account, you may roll your 403 ... Read Answer >>
  2. Can I return funds to my Roth IRA after I have taken it as a distribution?

    Yes. You can roll over the amount to the Roth IRA, or another of your Roth IRAs (excluding inherited Roth IRAs), provided ... Read Answer >>
  3. I am starting a limited liability company (LLC). I will be the sole member. Can I ...

    In a word, yes. A limited liability company (LLC) is eligible to establish a simplified employee pension (SEP). Keep in mind ... Read Answer >>
  4. Can a spouse who is not named as a beneficiary receive assets from an IRA?

    It depends.Generally speaking, the designation of beneficiary form dictates who receives the assets from the individual retirement ... Read Answer >>
  5. How do my siblings and I receive inherited pension benefit payments from our deceased ...

    Generally, the provisions of the plan document determine the distribution options available to beneficiaries of retirement ... Read Answer >>
  6. Can I borrow from my annuity to put a down payment on a house?

    Learn how you can borrow money from an annuity for a house down payment, but also understand why fees and penalties make ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center