What are investments intended to defer or eliminate taxes for the investor called?

Investments intended to defer or eliminate taxes for the investor are referred to as tax shelter investments. These types of investments typically provide certain tax advantages, such as deductions or credits, that can reduce the investor's taxable income or defer tax liability to a later date.

Tax shelter investments may include options like real estate investments, limited partnerships, or specific municipal bonds that generate tax-exempt income. The core idea is to leverage the tax code to minimize tax exposure, thus enhancing the overall return on investment.

Understanding the unique characteristics of tax shelter investments is crucial for financial planning, especially because they can significantly impact an individual's tax strategy and net income. In contrast, other investment types, such as passive activity investments or at-risk investments, do not directly focus on providing tax advantages in the same way that tax shelters do.