Earning Assets

What is 'Earning Assets'

Earning assets is an income-producing investment that is owned by a business, institution or individual. Earning assets include stocks, bonds, income from rental property, certificates of deposit (CDs) and other interest or dividend earning accounts or instruments.

Income from earning assets must be reported on the appropriate tax filings. Institutions send yearly statements for tax reporting purposes that include the total amount of interest and/or dividends earned. Income from rental properties must also be declared.

BREAKING DOWN 'Earning Assets'

Some earning assets, such as certificates of deposit, require no additional effort once the initial investment is made. Others, such as rental properties, require ongoing effort in terms of time and money. In the case of rental property, this could include routine maintenance, improvements, taxes and insurance, and general management of the property.

RELATED TERMS
  1. IRS Publication 527 - Residential ...

    A document published by the Internal Revenue Service (IRS) that ...
  2. Income Property Mortgage

    A loan given to an investor to purchase a residential or commercial ...
  3. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
  4. Residential Rental Property

    A type of property that derives more than 80% of its revenue ...
  5. Rental Real Estate Loss Allowance

    A federal tax deduction of up to $25,000 that is available to ...
  6. Real Estate Investment Group

    An organization that builds or buys a group of properties and ...
Related Articles
  1. Personal Finance

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  2. Retirement

    Generate Income For Retirement with Real Estate

    Learn whether rental income is compatible with your lifestyle, how to identify suitable properties, common pitfalls to avoid and how to secure financing.
  3. Personal Finance

    How To Prevent A Tax Hit When Selling A Rental Property

    Rental property ownership has its benefits but when selling you can face a big tax hit. Thankfully there are ways to reduce your capital gains exposure.
  4. Personal Finance

    How to Reduce Real Estate Investment Taxes

    Real estate tax law is not the same for rental properties as it is for residences. These tips can help you pay less in taxes.
  5. Managing Wealth

    The Pros And Cons Of Owning Rental Property

    Owning rental property can be a rewarding and profitable experience, but it comes with some real risks.
  6. Personal Finance

    Is It Worth Buying A Second Home To Rent?

    Mortgage interest rates are low, but consider these dos and don'ts before making the leap into rental property ownership.
  7. Investing

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
  8. Personal Finance

    Sell Your Rental Property For A Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  9. Personal Finance

    Tax Breaks For Second-Home Owners

    The tax rules on a second home vary, depending on how the property is used.
  10. Managing Wealth

    How Rental Property Depreciation Works

    It's a bit tricky, but a valuable tool to make your investment pay off.
RELATED FAQS
  1. When I retire, will collecting rent from property I own cause me to be penalized ...

    The rent amounts to $6500/month. ... Read Answer >>
  2. An appraiser forms the following estimates for a rental property ...

    Free info on financial certification exams including study guides, exam questions, and much more! Read Answer >>
  3. What do I do with out of state property and income reporting?

    If I own a single family home that I rent out in another state and receive income for, does that need ... Read Answer >>
  4. What do real estate investors look for in a property?

    Profit from real estate investments by either flipping homes or becoming a landlord. Learn best practices for a successful ... Read Answer >>
  5. What is the difference between earnings and income?

    See how earnings and income are different and when they are used in relation to personal finance versus a business' financial ... Read Answer >>
  6. Are Certificates of Deposit (CDs) Taxable?

    Learn the tax consequences on certificates of deposit, how they are reported and how penalties on early withdrawals can affect ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center