There Are Three Main Types of Income Subject to Federal

question 15

Multiple Choice

There are three main types of income subject to federal taxation. Which of the following types of income includes income generated from rental real estate investments?

• A) Active income
• B) Portfolio income
• C) Passive activity income
• D) Residual income

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Definitions:

Riparian Rights

Legal entitlements of landowners to access and use water from a river, stream, or other watercourse flowing adjacent to their land.

Conservation Movement

A social and political effort aimed at preserving, protecting, and restoring the natural environment from degradation and exploitation.

Forest Reserves

Public lands set aside to preserve forest ecosystems, protect watersheds, and support biodiversity conservation.

Public Domain Lands

Lands owned by the government that are not reserved for governmental or specific uses and are available for private use under certain conditions, such as settlement and cultivation.