- An activity in which you do not materially participate. Real estate rentals and limited partnerships are examples of passive activities.
hands off involvement, detached, uninvolved
Related Terms and Acronyms
- Active Income — Definition,
- Active income refers to wages, tips, and profits from your business or employment that you partake in. It also includes portfolio income such as interest and dividends, but you cannot usually offset active income with passive losses.
- Dividend — Definition,
- Distribution of earnings to shareholders. In credit unions, it's the money paid to members for deposits, similar to the interest banks pay to their customers for deposits.
- Lease (lse) — Abbreviation,
- A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
- Passive Income — Definition,
- Income coming in on a regular basis, with little or no maintenance.
- Passive Loss — Definition,
- Loss from a passive activity. Passive loss rules limit the amount of passive loss you can deduct to the total of your other income from passive activities.
- Recognized Gain or Loss — Definition,
- The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.
- Security — Definition,
- A tradable financial implement that represents ownership, the rights to ownership or debt.
- Property designated as collateral.
- A document stating ownership of a stock or bond.