Definition Of Passive Income

Passive income is income that requires little to no effort to earn and maintain.

Definition of passive income. Passive income loss a special category of income loss derived from passive activities including real estate limited partnerships and other forms of tax advantaged investments. Examples of passive income include rental income and any business activities in which the earner does not materially participate. As with active income passive income is usually. In other words it s basically what s referred to as making money while you sleep.

Investors are limited in their deduction of passive losses against active sources of income such as wages salaries and pension income. It is called progressive passive income when the earner expends little effort to grow the income.