Definition of Investment income:
Capital gains, dividends, interest, and rent generated by investment, and not by trading activities. Also called unearned income, investment income is generally taxable.
Investment income is income that comes from interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit made through an investment vehicle of any kind. Generally, individuals earn most of their total net income each year through regular 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 over time. Interest earned on bank accounts, dividends received from stock owned by mutual fund holdings, or sales of gold coins held in a safety deposit box would all be considered investment income. Often, income made on investments undergoes different, and sometimes preferential, tax treatment, which varies by country and locality.
Businesses also often have income from investments. On the income statements of publicly traded companies, an item called investment "income or losses" is commonly listed. This is where the company reports the portion of the net income obtained through investments made with surplus cash, as opposed to being earned with the company's usual line of business. For a business, this may include all of the above, as well as interest earned or lost on its own bonds that have been issued, share buybacks, corporate spinoffs and acquisitions.
Money derived from investments.
How to use Investment income in a sentence?
- Investment income is taxed at a different rate once it is withdrawn as compared to regular income.
- Investment income is income that is earned from investments, such as real estate and the stock market.
Meaning of Investment income & Investment income Definition