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What is Passive Activity Income?

April 26, 2017activity income passive

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What is Passive Activity Income?

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Passive Activity Income is income from a passive activity. A passive activity is any activity in which the taxpayer does not materially participate. This includes most rental activities and investments in partnerships, LLCs, etc., in which the taxpayer is not directly involved with the operations. Passive activity income also includes gains or losses from the sale of a passive investment.