Saturday, 24 May 2014

Look Out For Passive Income

Internet Marketing for Rolling In Passive Income
  •  Passive income is defined  as revenue you earn even when you aren’t actively working.  passive income is also called residual income.
  • Income  that stops coming  when you stop working is active income is . When you  quit your job or get the pink slip, your salary income stops.
  • Many people do not even know that there is another kind of income that can stream in even if you are not doing any work-that's passive income.With passive income, you would keep getting paid whether or not you do any meaningful work. You may do a lot of work initially to gather momentum, but finally  you reach a point where the passive income stream gets activated. At this point even if you  stop working  money will keep flowing to you through this stream regardless of your action or no action.
  • Do not confuse passive income with one-time lump sum payments like  inheritance or the sale of an assets like your home or some stock you own. Passive income means constant flow of income over a protracted period.Maybe  a few years,decades,or even generations.Usually ,however,it stops after a  protracted period for various reasons out of perview now.
  • suffice to know that passive  income  needs attention and  maintenance to keep it going.It could mean  checking your mail and depositing checks,or reporting this income for taxes.
  • Another interesting featureis  multiple streams of income, so you can increase chances of income flow incase one stream stops.
  • Examples of passive income are royalties on books ,songs,Audio/video CD.It also includes rental income from real estate property,or dividends from your stocks etc.

  • Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of "Unearned income".The American Internal Revenue Service categorizes income into three broad types, active (earned) income, passive (unearned) 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.

  • Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved. As with non-passive income, passive income is usually taxable; however it is often treated differently by the Internal Revenue Service (IRS).

  • There are three main categories of income: active income, passive income and portfolio income. Passive income does not include earnings from wages or active business participation, nor does it include income from dividends, interest or capital gains. For tax purposes, it is important to note that losses in passive income generally cannot offset active or portfolio income.You can find out mre about passive income here.

  • It is important to note that, by some, portfolio income is considered passive income; in which case dividends and interest would be considered passive. The important definition is the one the IRS uses, and to be sure your taxes are filed correctly, it would be prudent to check with the IRS or a tax professional on this matter if you have a blend of active, passive, and portfolio income.

  • 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.

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