Active Income

Revenue or income generated from a person's direct effort or investor's active participation in a business' operations. Salary and wages from regular employment or self-employment are primary examples of active income. This label comes into play in discussions about Tax Shelters, which contrasts active income with portfolio and passive income, which are the three types of ordinary income. For more information, see the "Investment Property Tax Advantages" article in the "Real Estate Investing" section.

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