Money received by an individual for personal effort is classified as ______________ income.

Question

Quizplus · Accepted Answer

Earned income is money received by an individual for personal effort, such as wages, salary, tips, and self-employment income. Passive income is money earned without active involvement in the activity that generated the income, such as rental income or dividends. Portfolio income is earned from investments, and excluded income is not subject to taxation, such as certain types of insurance proceeds. Capital gains are profits earned from the sale of investments.

Money Received by an Individual for Personal Effort Is Classified