Active Income

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DEFINITION of 'Active Income'

Income for which services have been performed. This includes wages, tips, salaries, commissions and income from businesses in which there is material participation.

INVESTOPEDIA EXPLAINS 'Active Income'

There are three main categories of income: active income, passive income and portfolio income. These categories of income are important because losses in passive income generally cannot be offset against active or portfolio income.

RELATED TERMS
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  3. Passive Income

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  4. Passive Activity

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