Please ensure Javascript is enabled for purposes of website accessibility

Blog

What is the difference between active and passive income?


 

Transcript:

The passive activity tax rules divide income and loss into three buckets: active, passive, and portfolio. Most income tends to be active, for example, salary income and most income from businesses people run. Passive income results from either businesses that person owns part of but doesn’t materially participate in or rental businesses. Losses from passive activities cannot offset active income for tax purposes. This means that if you have active income but passive losses then your taxable income will exceed your actual income meaning that you pay a larger amount of tax than you would on your true net income.

Advocate Covers:

Our Results

Service Agreements

Piston Aircraft Comprehensive Service Agreement

For Piston Aircraft  – $5,000 per year

Small Turboprop Comprehensive Service Agreement

For a single Turboprop Aircraft costing less than $2,000,000 – $7,500 per year

Large Turboprop Comprehensive Service Agreement

For Turboprop Aircraft costing more than $2,000,000 – $10,000 per year

Our Team

Meet the Attorneys

Jonathan Levy

Shareholder

Suzanne Meiners-Levy

Shareholder

Joseph Quackenbush

Managing Attorney

Letisha Bivins

Managing Attorney

Do you love aircraft? Work with our team of professionals!

Contact Us

Get in Touch
With Us

Get in Touch