Final Answer:
Income from property is referred to as unearned income.
Step-by-step explanation:
Income is broadly categorized into two types: earned income and unearned income. Earned income is the money earned through active participation in a business or employment, such as wages or salary. Unearned income, on the other hand, is the income generated without direct involvement in a productive activity. Income from property, including rental income and dividends, falls under the category of unearned income.
Unearned income is derived from investments, property ownership, or other passive sources. In the context of property, it encompasses rental income from real estate, interest from investments, and dividends from stocks. Unlike earned income, which is a result of active labor or services, unearned income is considered more passive in nature.
Understanding the distinction between earned and unearned income is crucial for tax purposes and financial planning. Tax rates and regulations often vary for these two types of income. Income from property, being unearned, may be subject to different tax treatment compared to income derived from employment or active business participation.
In summary, income from property is classified as unearned income, reflecting its passive nature and differentiation from earnings generated through direct labor or business activities. This categorization has implications for taxation and financial strategies, making it essential for individuals to be aware of the nature of their income sources.