The whole trick to financial success is creating passive income.

Two-thirds of it is used on passive income maintenance measures.

That corporation is taxed at a rate of less than 25% on the passive income.

In general, only partnership interests, which are not publicly traded, can create passive income.

"I have a client with an imbalance of passive income.

"Go for good investments, then try to structure them for passive income."

Without the passive income from the new partnership, $12,000 of the shelter's loss would have been deferred.

The balance carries over to future years and can be taken against passive income or when they sell the condominium.

On the other hand, buying successfully into a passive income generator is no mean feat.

Most investors have little or no passive income.

But the line separating passive income from other types of income is not hard and fast.

Excess deductions are suspended and may be used to offset passive income in future years.

What is more, the passive income generators have not offered attractive returns: only about 5 to 7 percent annually.

Passive income is an income received on a regular basis, with little effort required to maintain it.

In theory, passive income comes from any active business in which an individual plays an inactive role.

Now, passive income is needed to utilize passive losses fully.

Such a loss would also be deductible for those who had passive income to offset the loss.

The trouble, however, is that there is considerable ambiguity about what actually constitutes passive income.

Such losses on new investments can be used by upper-income taxpayers only to offset passive income.

Under the new tax code, however, passive losses can only be used to offset passive income.

They call it "passive income", or "the laptop lifestyle".

Economic rent is different from other unearned and passive income, including contract rent.

In order to obtain financial freedom, one must be either a business owner, an investor, or both generating passive income, particularly on a monthly basis.

Anyone with an annual earned income in excess of $250,000 cannot use the credits, except against the tax due on passive income.

Mr. Katz noted that losses can be deferred and used against future passive income.