Passive income refers to earnings derived from a rental property, limited partnership, or other investment in which a person is not actively involved. Passive income often gives the benefit of regular earnings without actively working.
A passive investor is an individual who invests money into a business, project, or property without taking an active role in managing or operating it. This hands-off approach allows investors to potentially earn income while leveraging the expertise and efforts of others.
Portfolio income consists of earnings derived from various investment activities including interest, dividends, royalties, and capital gains from the sale of investment property. It differs from earned income and cannot be used to offset passive activity losses.
