passive income

(redirected from Interest income)

Passive income

Income (such as investment income) that does not come from active participation in a business. Specified by the U.S. tax code.

Passive Income

Income from a venture in which an individual does not directly participate. The most common types of passive income are rents and income from a limited partnership. Some analysts consider income derived from securities such as dividends and coupons to be passive income, while others put it into a separate category as portfolio income. Passive income is taxable, but it is often treated differently than active 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. Investors are limited in their deduction of passive losses against active sources of income, such as wages, salaries, and pension income.

Passive income.

You collect passive income from certain businesses in which you aren't an active participant.

They may include limited partnerships where you're a limited partner, rental real estate that you own but don't manage, and other operations in which you're an investor but have a hands-off relationship.

For example, if you invest as a limited partner, you realize passive income or passive losses because you don't participate in operating the partnership and have no voice in the decisions the general partner makes.

In some cases, income from renting real estate is also considered passive income. On the other hand, any money you earn or realize on your investment portfolio of stocks, bonds, and mutual funds is considered active income. That includes dividends, interest, annuity payments, capital gains, and royalties.

Any losses you realize from selling investments in your portfolio are similarly active losses.

Internal Revenue Service (IRS) regulations differentiate between passive and active income (and losses) and allow you to offset passive income only with passive losses and active income with active losses.

passive income

See passive activity income.

Passive Income

Passive income is income from business activities in which the taxpayer does not materially participate, and most rental activities. See also Material Participation and Portfolio Income.
References in periodicals archive ?
Net interest income arising from the APP increased by EU140 million, to EU575 million, as a result of the continuing securities purchases under this programme.
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Net interest income after provision for loan losses increased by USD 707,000, or 12.
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7872, which requires the parties to impute interest income and expense on below-market-rate loans and treat the imputed interest as a gift.
These rate changes have dramatically affected the prime rate and your bank's net interest income (the difference between your bank's interest income from loans and its interest expense for deposits).
This approach--continuing to adjust the basis of the hedged asset without requiting recalculation of the effective yield and reported interest income/expense--allows companies to change what otherwise would have been recorded as interest income (varying with changes in the benchmark interest rate) into gain or loss on disposition of the asset.