Unearned Income: 9 Types You Need to Know About

Many people dream about living off passive income. The concept of working hard and creating a perpetual stream of income is appealing.

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Instead of working eight hours per day or more, you can work much less. Suppose you make some smart moves by investing in rental real estate or dividend stocks.

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What is unearned income, and how does it differ from earned income. There is a definition of both as stipulated by the IRS.

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Unearned income is income from sources, not from employment or a job.

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Investment income is the profit generated from the sale of real estate or stocks.

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Mutual funds pay capital gains distributions to shareholders. This money comes from selling stocks, bonds, or other assets owned by the mutual fund.

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Dividend income results from money paid to stockholders from the dividends paid by companies.

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Retirement income is derived from pensions, annuities, and distributions from 401(k) plans and Individual Retirement Accounts (IRAs).

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Unemployment benefits are paid to individuals who lose their jobs through no fault of their own.

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Unearned Income: 9 Types You Need to Know About

Many people dream about living off passive income. The concept of working hard and creating a perpetual stream of income is appealing.

Instead of working eight hours per day or more, you can work much less. Suppose you make some smart moves by investing in rental real estate or dividend stocks.

What is unearned income, and how does it differ from earned income. There is a definition of both as stipulated by the IRS.

Unearned income is income from sources, not from employment or a job.

What is Unearned Income?

Investment income is the profit generated from the sale of real estate or stocks.

Investment Income

Mutual funds pay capital gains distributions to shareholders. This money comes from selling stocks, bonds, or other assets owned by the mutual fund.

Long-Term Capital Gain Distributions

Dividend income results from money paid to stockholders from the dividends paid by companies.

Dividend Income

Retirement income is derived from pensions, annuities, and distributions from 401(k) plans and Individual Retirement Accounts (IRAs).

Retirement Income

Unemployment benefits are paid to individuals who lose their jobs through no fault of their own.

Unemployment Benefits

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