Unearned Income

What is 'Unearned Income'

Unearned income is any income that comes from investments and other sources unrelated to employment services.

BREAKING DOWN 'Unearned Income'

Examples of unearned income include interest from a savings account, bond interest, alimony, and dividends from stock. As long as this income is "realized" then it is taxable.

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RELATED FAQS
  1. Does unearned revenue affect working capital?

    Learn how an unearned revenue, or deferred revenue, account affects a company's current liabilities and calculation of the ... Read Answer >>
  2. What is the difference between accrued revenue and unrealized revenue?

    Understand if there are any differences between accrued revenue and unrealized revenue. Learn about unearned revenue and ... Read Answer >>
  3. What is the difference between gross income and taxable income?

    Understanding common tax terms including gross income and taxable income can help individuals navigate tax accounting in ... Read Answer >>
  4. What is the difference between gross income and earned income?

    Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual ... Read Answer >>
  5. What does the IRS say about what constitutes taxable income?

    Find out what the Internal Revenue Service, or IRS, considers to be taxable income and nontaxable income, including value ... Read Answer >>
  6. A man opened a Uniform Transfers to Minors Account for his grandson several years ...

    The correct answer is c. Income in UGMA/UTMA accounts is always taxable, the question is at whose bracket. The general rule ... Read Answer >>
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