Passive Income Generator

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Passive Income Generator (PIG)

An investment that favors passive income, such as an income-oriented real estate limited partnership.

Passive Income Generator

Any investment that produces 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. Thus, if an investor buys an apartment complex or a piece of an oil and gas limited partnership, this is considered a PIG. Passive income is taxable, but it is often treated differently than active income.

passive income generator (PIG)

The name given to an investment offered to taxpayers who have excess passive activity losses and need some passive activity income to offset the losses. (Be careful of any investment touted as a PIG—if the only reason for an investment is the tax benefits it might produce,then the investment should be made with great caution.)

References in periodicals archive ?
The following are a few examples of intangible assets that are considered as passive income generators - computer software, patents, copyrights, licenses, franchises, trade-marks and goodwill.
Passive Income Generators (PIGs) can absorb Passive Activity Losses (PALs) one-for-one, and there are no Limitations on combining PIGs with existing Passive Losses.
By definition, carry forwarded Passive Activity Losses from rental property can only be used when A) There is sufficient Passive Income to offset the Passive Losses; or B) The source of those PALs is disposed of; or C) The Investor acquires a Passive Income Generator (PIG).
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