Plain meaning
Income such as interest, rent, royalties, and portfolio dividends earned from investments rather than active operations.
Also called
investment income in a corporation
aggregate investment income
Key points
- Passive Investment Income is used to classify or measure income for tax reporting and benefit calculations.
- The amount may be calculated differently depending on whether the issue is taxable income, net income, total income, or a specific income source.
- CRA and benefit programs often use income figures from the assessed tax return rather than informal estimates.
- A change to the reported amount can affect tax payable, instalments, credits, benefit payments, and later reassessments.
Why it comes up
Passive income can affect CCPC tax treatment, refundable taxes, and access to the small business deduction.