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Definition of 'Investment Income'
Income coming from interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit that is made through an investment vehicle of any kind.
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Investopedia explains 'Investment Income'
Generally, most people earn a large portion of their total net income through employment income. However, disciplined saving and investment in the financial markets can grow moderate savings into large investment portfolios, yielding an investor a large annual investment income.
In income statements of publicly traded companies, you will commonly see an item called investment income (or losses); this is where the company reports the portion of the net income that was obtained through investments made with surplus cash as opposed to being earned with the company's usual line of business.
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The foreign tax credit provides a break on investment income made and taxed in a foreign country.
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Learn which investment vehicles are bringing in income, which type of income, how much and the tax advantages.
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These guiding principles will help you avoid common folly during the decision-making process.
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Be informed about benefits and deductions that may apply to you and avoid costly mistakes on your return.
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IRA assets can't be taxed twice - find out how to avoid paying the second time around.
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Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
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