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Simple English definitions for legal terms
unearned income
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A quick definition of unearned income:
Unearned income refers to money that you receive without having to work for it. This can include income from investments, such as interest, dividends, or capital gains, or any other income that isn't compensation for services. Basically, it's money that you get just because you own something or have invested in something, rather than because you did a job or provided a service.
A more thorough explanation:
Unearned Income
Unearned income is money that you receive from investments, such as interest, dividends, or capital gains, or any other income that isn't compensation for services.
- Interest earned on a savings account
- Dividends received from stocks
- Capital gains from selling a property
These examples illustrate unearned income because they are all forms of income that are not earned through work or services provided. Instead, they are generated through investments or other passive means.