Passive Income Definition Tax law distinguishes between active income and passive income. Returns generated from investments or business activities that require the continued effort of the taxpayer are considered active income. Consider returns coming from investments or business activities that require little or no participation from the taxpayer passive income. Another type of income is
See Also: Brand Equity Return on Common Equity (ROCE) Return on Equity Analysis Carried Interests Equity Interest Definition Equity interest, defined as the amount of equity a single person holds in a business, is a common concept to the small business world. For example, if an angel investor receives 25% ownership of a company, the
See Also: Dividend Yield Capital Impairment Rule Dividend Payout Ratio Financial Ratios Dividends Explained Dividends are corporate profits distributed to shareholders. When a company makes a profit, the board of directors can decide whether to reinvest the profits in the company or to pay out a portion of the profits to shareholders as a dividend
See Also: Indirect Labor Direct Labor Direct Cost vs. Indirect Cost Unsecured Credit Flat Tax Rates Tax Abatement Direct Tax Definition Direct tax, defined as a tax directly on the amount of a taxable item, is the current tax method of the U.S.A. Currently in the U.S., this includes taxes wages, property, capital gains, or
See Also: Basis Points Make or Buy Business Decision Collateralized Debt Obligations Carried Interests Letter of Credit Basis Definition In accounting, the basis definition is the value of an asset for tax purposes. The basis of an asset is the cost of the asset reported to the Internal Revenue Service (IRS). It includes the original purchase price of the asset
See Also: Tax Brackets Marginal Tax Rate Deferred Income Tax Flat Tax Rates Company Valuation The capital gains definition is the proceeds from the sale of an asset. These gains can be realized from the sale of stocks, bonds, real estate, equipment, intangible assets, or other property. When the asset or property is sold, the
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