Plain meaning
A corporate tax classification generally involving income from property, subject to exceptions such as sufficient full-time employees.
Also called
SIB
Key points
- Specified investment business income is generally not treated the same as active business income for small business deduction purposes.
- A corporation may avoid the classification if it employs more than five full-time employees or meets another exception.
- Rental and investment corporations often need to consider the rules carefully.
- Classification affects corporate tax rates and refundable tax mechanisms.
Why it comes up
The concept matters for owner-managed corporations, rental corporations, and policy changes affecting passive investment income.