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Finance Dictionary and Glossary of Investment Terms
Conduit Theory
Definition 1.
A theory stating that an investment firm passing all capital gains, interest, and dividends onto their customers/shareholders shouldn't be levied at the corporate level like most regular companies are.
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Definition 2.
The idea that qualifying investment companies and REITs should be allowed to avoid double taxation by passing interest, dividend income and capital gains directly to shareholders, without also incurring a tax liability.
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