Portfolio income is the income earned from investments. This income includes dividends, royalties, interest and capital gains. There are 3 types of income that can be earned from investments. They are active, passive and portfolio income. Active income is the money that comes from performing a service and compensation is provided. Types of active income are wages, salaries and commissions. Passive income is income from business investments from rental property, partnerships and other business ventures in which the person is not playing an active role. Passive income is considered taxable and does not include wages, dividends, capital gains or interest.

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