Posted in Finance, Accounting and Economics Terms, Total Reads: 147
Definition: Passive Income
Passive income refers to the income one person earns even when he doesn’t take part actively in business. So passive income is the income one person earn regularly with no efforts. Passive income is usually taxable.
It is different from active income in a way that if a person stops working the active income getting from that work also stops while in passive income when the person doesn’t do meaningful work and still receive income. Passive income is usually for short period of time and last mainly for few years.
Example of Passive Income
1) Any gain from selling the property
2) Any interest, any dividends received from the investments
3) Any rent from the property the person owns
4) Any money received in a lottery
Passive income is different from person to person for an individual gain from selling property is passive income while for a property dealer it is an active income.