Many people dream about living off passive income.
The concept of working hard and creating a perpetual stream of income is appealing.
Alternatively, you can be lucky and receive a large inheritance or win big at a casino.
These income sources are different from receiving a regular salary in a 9-to-5 job.
The Internal Revenue Service (IRS) considers these sources of income and several others as unearned income.
What is Unearned Income?
Unearned income is income from sources, not from employment or a job.
For example, income from a salary, wages, tips, and a few other sources are earned income.
The IRS views unearned income as income from sources other than personal effort.
Of course, there are other types, but the ones on this list are common.
Types of Unearned Income
Long-Term Capital Gain Distribution
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