Active Income

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DEFINITION

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

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
  1. Income

    Money that an individual or business receives in exchange for providing a good ...
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  3. Passive Income

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  4. Passive Activity

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  5. Portfolio Income

    Income from investments, dividends, interest, royalties and capital gains. Portfolio ...
  6. Social Security

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  7. Material Participation Test

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