Homework SourseDavid has income from several sources Which one is considere
David has income from several sources. Which one is considered passive income? *
| Dividends paid on shares of a mutual fund in his 401(k) account. | |
| Dividends paid on shares of a mutual fund in his Roth IRA. | |
| Unemployment benefits received during a one-month layoff. | |
| Rent received from the full-year rental of his house in the country. | |
Solution
Answer Rent received from the full-year rental of his house in the country.
Passive Inome is that income which arises mainly from the rental activity or by a business in which one have financial interest but he did not pay any active role in the activities of business.Dividend paid on shares is not considered as passive income despite of the fact that dividend requires no active participation in the business activities
