what are examples of passive income 
passive income is defined by the irs as any earnings from a rental property limited partnership or other business in which a person is not actively involved in the business common forms of passive income include rents royalties interest dividends and capital gains the bottom lineprior to the mid 1980s american investors could avoid taxation by investing in foreign business entities that generated passive income such as rental real estate foreign mutual funds and global holding companies since then however this tax loophole has been closed and u s investors holding such foreign assets must declare this income in passive foreign investment companies pfics which are taxed as ordinary income in order to meet pfic status a foreign firm must have 75 of their gross income be categorized as passive or more than half of their assets held for passive income generation 