Passive income is a form of earning money without materially participating in the activity from which the income is derived. There are two definitions for the reader to understand. There is the common business definition and the tax code definition.
One of the many forms of portfolio income; interest income is generally a result of a return on investment. Most commonly found in the banking industry, it is the amount a bank pays to those depositing money and the amount the bank charges to use the same money. This income is reported on the individual’s tax return.
Sales are a component of revenue. Revenue encompasses several sources of income including sales. Other sources of revenue include interest, trust monies, royalties, and fees. In effect, revenue includes all sources of income, realized and unrealized. Sales are divided into two levels, gross sales are all sales at the regular price; net sales are gross sales less discounts or adjustments associated with that particular product(s).