A Money Coach in Canada

Follow & Subscribe

Passive income is more or less what it sounds like: income generated without the active involvement of the recipient. The term usually refers to income from rental property, but it can also include income from royalties, residuals, patents and licensing agreements. Proceeds from a vending machine are passive income; so is the rent from a basement suite.

It usually involves an initial outlay of time or money and continues to generate a return without further investment. However, passive income excludes interest, dividends and capital gains, all of which are considered portfolio income. For tax purposes, losses from passive income cannot be offset against other types of income.


Have an accounting question? Submit it as a comment so it can be answered in a future “Ask an Accountant” entry.


About the Author

Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

Leave a Reply

CommentLuv badge