The income from rental properties is a good example of a passive activity. Making a distinction between passive and active income is important because you can claim a passive loss only against income generated from passive activities. You cannot claim a passive loss against active income.
Investment dictionary. Academic. 2012.
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passive activity — UK US noun [C or U] ► a type of business in which it is possible to make money without being involved in an active way: »He makes most of his money from passive activities such as property rental … Financial and business terms
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passive — pas·sive / pa siv/ adj: not involving, deriving from, or requiring effort or active participation imposed a passive duty not to interfere; specif: of, relating to, or being business activity in which the investor does not have immediate control… … Law dictionary
passive — As used in law, this term means inactive; permissive; consisting in endurance or submission, rather than action; and in some connections it carries the implication of being subjected to a burden or charge. As to passive debt passive negligence… … Black's law dictionary
passive — [[t]pæ̱sɪv[/t]] 1) ADJ GRADED (disapproval) If you describe someone as passive, you mean that they do not take action but instead let things happen to them. His passive attitude made things easier for me... Even passive acceptance of the regime… … English dictionary
passive — adj. VERBS ▪ be, seem ▪ become ▪ remain ADVERB ▪ extremely, fairly, very … Collocations dictionary
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Passive nuclear safety — describes a safety feature of a nuclear reactor that does not require operator action or electronic feedback in order to shut down safely in the event of a particular type of emergency (usually overheating resulting from a loss of coolant or loss … Wikipedia