User:Delahoyao/passiveincome

Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.

The U.S. Internal Revenue Service categorizes income into three broad types, active income, passive income, and portfolio income. It defines passive income as only coming from two sources: rental activity or "trade or business activities in which you do not materially participate." Other financial and government institutions also recognize it as an income obtained as a result of capital growth or in relation to negative gearing. Passive income is usually taxable.

Contents
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 * 1Contents
 * 2Passive vs active
 * 3Examples[edit]
 * Real life
 * 4See also[edit]

Material Participation
in order for an activity to be considered passive it has to be an activity in which the owner of it does not materially participate in. a person is considered to have a material participation in activity if.


 * they participate in the activity for more then 500 hours during the year
 * Ones participation is more then a 100 hours and their is no one else who is involved.
 * Their participation is more then anyone else involved



Passive vs active
this video talks about what active income is and shows her active income requires work on order to maintain and for the most part stays the same you get paid the same every month and if you don't work you don't learn then you're active income stays the same even if your work constantly.

And it Compares passive income to rental income buying a property and benefiting from it in the future also mentioning that it is Progressive because it grows without any more work from yourself Brentwood center go up with inflation in home values will too income increases effortlessly.

Examples[edit]
Some examples of passive income are:

Any type of cash flowing property income

 * rent
 * Profits, cash flow, and earnings from a business that does not require direct involvement from the owner or merchant;
 * Rental income and incoming cash flow from property or any piece of real estate
 * Rental income and incoming cash flow from property or any piece of real estate

Real life
pr

See also[edit]

 * Cash flow
 * Capital gains
 * Economic rent
 * Profit
 * Property income
 * Rent seeking