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Investment Income

 
Investment Dictionary: Investment Income

Income coming from interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit that is made through an investment vehicle of any kind.

Investopedia Says:
Generally, most people earn a large portion of their total net income through employment income. However, disciplined saving and investment in the financial markets can grow moderate savings into large investment portfolios, yielding an investor a large annual investment income.

In income statements of publicly traded companies, you will commonly see an item called investment income (or losses); this is where the company reports the portion of the net income that was obtained through investments made with surplus cash as opposed to being earned with the company's usual line of business.

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Financial & Investment Dictionary: Investment Income
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Income from securities and other nonbusiness investments; such as Dividends, Interest, Option Premiums and income from a Royalty or Annuity. Interest on Margin Accounts may be used to offset investment income without limitation. Investment income earned by passive activities must be treated separately from other Passive income. Expenses incurred to generate investment income can reduce investment income to the extent they exceed 2% of adjusted gross income. By excluding capital gains from the calculation, tax law, in effect, prevents a taxpayer from claiming an ordinary deduction for margin interest incurred to carry an investment that is taxable at the favorable capital gains rate. Also called Unearned Income and portfolio income.

 
 

 

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Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more