What is a portfolio income?

Portfolio income is money received from investments, dividends, interest, and capital gains. Royalties received from investment property also are considered portfolio income sources. It is one of three main categories of income. The others are active income and passive income. Most portfolio income gets favorable tax treatment.

What are the three types of portfolio income?

Just like the different types of income, portfolio income itself is often divided into three categories. Generally, the three categories from which you can make money on your investment portfolio are interest earnings, dividends, and capital gains. 1. Interest Interest-bearing accounts often show up on lists of ways to make passive income.

Does portfolio income come from passive investments?

Portfolio income does not come from passive investments and is not earned through regular business activity. It comes from dividends, interest, and capital gains, or from interest paid on loans. The categories of income are important for tax purposes. Losses in passive income generally cannot be offset against active or portfolio income.