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Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.

The U.S. Internal Revenue Service assembles income into three broad types, active income, passive income, and portfolio income.1 It defines passive income as only coming from two sources: rental activity or"exchange or business activities in which you do not materially participate. "23 Other financial and government institutions also recognize it as an income obtained as a result of funding growth or in relation to negative gearing.

Passive income differs from earned income and portfolio income in an assortment of ways. Passive income is generally defined as a stream of income earned with little effort, and it is referred to as progressive passive income when there is little effort needed from the individual receiving the passive income in order to increase the flow of income.

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Passive income differs from busy income which is defined as any earned income including each of the taxable income and wages the earner get out of working. Linear active income refers to one constantly needed to remain active to maintain the flow of income, and once an individual chooses to stop working the income will probably also cease, examples of active income include wages, self-employment income, substance participation in an s corp, or a partnership.4 portfolio income is derived from investments and includes capital gains, interest, dividends, and royalties.5.

Any kind of cash flow property income that includes profits from ownership of funds, rent from ownership of assets like Rental income and incoming cash flow from home or any bit of property, and interest from owning financial assets.6

Royalties are payments made by one company (the licensee) to another company or person (the licensor) in exchange for the right to use intellectual property (book, audio, video) owned by the licensor.

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Types of limited partnerships might be considered passive so long as the limited partner does not have any function in the company and they exchange their capital investment in return for a share of the actions gain.

In order to be considered a rental activity, tangible property is used by clients and the income paid from the action comes from the amount paid for the use of their property and is not considered a rental if:

"Earned Income vs Passive Income vs Portfolio Income: A Comparison - Just Ask Ben Why". Only Ask Ben Why. 2015-06-22. Retrieved 2018-05-12.

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a b "Publication 925 (2017), Passive Activity and At-Risk Rules Internal Revenue Service". www.irs.gov. Retrieved 2018-05-12.

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It is quite possible if you are consistent and persistent then over a period of time you may build a substantial residual income. Dont be surprised is this passive income amount exceeds your main income from your regular job or business.

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Nowadays it's very simple to produce your own site. All you need is free domain name, some hosting space and packages like Wardress to make a blog. Use a field or the topic you are passionate about and write frequently something that's unique, interesting and useful to the internet community. .