Have you developed a particular brand or system that others can benefit from?  The options here vary quite a bit.  For example the rock band Def Leppard is able to license their brand because of their massive success.  Or look at a college sports franchise like the UW Badgers, who have created an amazing brand around a great sports team (Go Badgers!), everything from t-shirts to coffee mugs.  All of these are potential sources of passive income, if you are the one that has created the brand or process of course!
Income tax is a cost of doing business and that cost carries over into the business of real estate ownership and operations. In July 2017, in the depths of the summer, the Federal Department of Finance (“Finance”) announced drastic changes that would have changed that cost of doing business for those owning shares of a Canadian controlled private corporation (“CCPC”). When ultimately distributed to the individual shareholder in the form of a dividend, investment income earned on the retained earnings generated from an active business would have cost the shareholder an ultimate income tax rate equal to 73% of the investment income. These proposed changes to the “passive income” rules were very complex and would have had the potential to shift the after-tax return for CCPCs while leaving the tax burden of public corporations, foreign corporations and tax-exempt entities unaffected.
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You need to decide which machines you want to run, get the necessary licenses to operate them (you're selling items so you need to get sales licenses and whatnot from your state), buy the machines and a truck for the items in the machines, find a supplier of the products, and then finally you can secure locations. Finally, you need to service them periodically or hire someone to service them.
As a result of this tax rate differential, the owner of a CCPC is almost always better off retaining corporate earnings and investing within their corporation. While a similar amount of combined corporate and personal tax is ultimately paid by business owners when monies are withdrawn through dividends, taxes can be deferred until such time as the money is required personally. This effectively allows business owners to temporarily obtain the benefit of investing a larger amount of money than would otherwise be available if they earned the money personally or immediately withdrew profits from their corporation.
The government has announced its intention to introduce legislation that will reduce the SBD limit by $5 for every $1 of investment income above a $50,000 threshold, beginning in 2019. Once passive investment income exceeds $150,000, the SBD limit will be reduced to zero and the CCPC will pay tax at the general corporate tax rate of 26.5% as opposed to the 13.5% SBD Rate (for Ontario CCPCs).
But nowadays, there is so much opportunity if you search for brand-suitable domains and also keyword-rich or otherwise popular names on the myriad of new domain name extensions like .io, .at etc.  And I should know, because I’ve paid several domain squatters a king’s ransom to purchase these sorts of domain names in the last few years!  Continue reading >
To save time and effort, a person can group two or more of their passive activities into one larger activity, provided they form an "appropriate economic unit." When a taxpayer does this, instead of having to provide material participation in multiple activities, they only have to provide it for the activity as a whole. In addition, if a person includes multiple activities into one group and has to dispose of one of those activities, they’ve only done away with part of a larger activity as opposed to all of a smaller one. 
There are basically three types of income: earned, portfolio, and passive. When it comes to filing your tax return, each of these types of income are taxed differently. Therefore, it is worth understanding the difference between the three to minimize your tax burden. Below are the three types of income, how they are categorized, and the tax implications for each.
For those willing to take on the task of managing a property, real estate can be a powerful semi-passive income stream due to the combination of rental and principal value appreciation. But to generate passive income from real estate, you either have to rent out a room in your house, rent out your entire house and rent elsewhere (seems counterproductive), or buy a rental property. It’s important to realize that owning your primary residence means you are neutral the real estate market. Renting means you are short the real estate market, and only after buying two or more properties are you actually long real estate.
For one thing, there are fewer barriers to entry compared to other types of investments. For example, both Prosper and Lending Club, two of the largest P2P platforms, allow investors to fund loans with as little as a $25 investment. Both lenders also open their doors to non-accredited investors. While Title III of the Jumpstart Our Business Startups (JOBS) Act allows both accredited and non-accredited investors to invest through crowdfunding, every crowdfunding platform has its own policy regarding who can participate.
1. Interest: If the interest a landlord pays on their mortgage isn’t their biggest expense, it is certainly close to it. Even with rates as low as they are today, interest payments are a sizable cost that needs to be accounted for. Nonetheless, for as intimidating as interest payments can be, they are not without their benefits. Mortgage interest has become synonymous with one of the largest deductions landlords can make. Passive income investors can deduct mortgage interest payments on loans used to acquire or improve a rental property. However, it is important to note that they can also deduct the interest paid on credit cards specifically used to to maintain rental property activity.
Earlier this year, the government passed new tax legislation governing Canadian-controlled private corporations (CCPCs), including incorporated professionals. As we enter the final weeks of 2018, one new measure is of particular concern — the potential looming loss of the small business deduction (SBD) in 2019 for corporations with more than $50,000 of passive investment income in 2018.
For tax years beginning after January 24, 2010, the following disclosure requirements for groupings apply. You’re required to report certain changes to your groupings that occur during the tax year to the IRS. If you fail to report these changes, each trade or business activity or rental activity will be treated as a separate activity. You will be considered to have made a timely disclosure if you filed all affected income tax returns consistent with the claimed grouping and make the required disclosure on the income tax return for the year in which you first discovered the failure to disclose. If the IRS discovered the failure to disclose, you must have reasonable cause for not making the required disclosure.
Hello from the UK! Fundrise and Wealthfront are only available to US residents it seems :(. Any other readers from the UK here? The only thing I have managed to do from Sam’s list is getting a fixed rate bond (CBS is having a 5-year fixed rate at 2.01% – not great but the best I could find ). Don’t know if the FIRE movement will ever take off here but would love to trade tips/ideas on how to reach FI and have the freedom to consider alternative rythms to living.
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The SBD provides a low rate of corporate tax on the first $500,000 (known as the “SDB limit”) of active business income annually. Business owners and incorporated professionals who don’t need to pay out corporate earnings to fund their personal lifestyles are able to enjoy a significant tax deferral of up to 41 per cent by simply leaving funds in their CCPC and investing them.
Passive income is income you can earn without actually exerting yourself in a job. The idea of passive income rose in the early 1900s with the rise of income investing. Back then, Americans didn’t have the social protections they enjoy now (social security and Medicare for example). You may take your retirement plan for granted, but before these policies were enacted, the majority of the elderly working class lived in poverty.
Qualified dividends are taxed the same as long-term capital gains. In 2018, you can earn up to $38,600 in ordinary income without being taxed on long-term capital gains or qualified dividends. If you earn between $38,600 and $425,800 in ordinary income, your long-term capital gains tax rate is 15 percent, which would also apply to qualified dividends. If you make more than $425,800, the rate is 20 percent.
Millionaire Mob is a former investment banker that hung up his suit and 'deal sleds' to focus on ways to travel the world, build great relationships and learn. I am looking to help others learn passive income techniques, invest in dividend growth stocks, earn travel rewards and achieve financial freedom. I increased my net worth from -$60,000 (yes, negative) to over $500,00 in 5 years. I used Personal Capital to track my net worth. I love their platform.

I agree mostly with the real estate advice. I’m looking for ways to take advantage of the condo I own to get up the rent from ~$0.90/ft to the $1.2-1.5/ft that seems more like the range in the same area. I’d have to put in a bit of capital (probably 10k on the low end for just the basics up to 40k if I wanted to remodel the kitchen and 2 bathrooms up to par with the area), so the return is likely there if those upgrades warrant $1.30/ft (given the unit is larger than most 2br/2ba in the area).
If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception.
“There is no such thing as 100% passive income,” says Flynn. “Even with real estate you still have to manage your properties, or even with the stock market, which is potentially passive income, you still have to manage your portfolio. With online business, there is no such thing as 100% passive income — and this is coming from a guy with a blog called SmartPassiveIncome.com. The definition of passive income is ‘building these businesses of automation,’ but in order to keep them automated and keep that trust going with your audience on top of that, you do have to keep it up every once in a while — so a lot of time upfront and a little time after. But there is alway time involved.”
I think also a very good way to earn a nice passive income is investing in Cryptocurrency, especially in Masternode Cryptocurrencies, which provide a passive income in coins, also those carefully picked coins grow in value, so it’s a double gain! And a great coin to invest in at the moment is GINCOIN, which is the fuel for a really succesful project. Find more at GINCOIN Website: https://gincoin.io/ 😉
Peer-to-Peer Lending: Earn up to 10% in returns by lending individuals, organizations and small companies who don't qualify for traditional financing through peer-to-peer lending platforms like Lending Club. You can lend $100, $1,000, or more to borrowers who meet lending platform financial standards. Like a bank, you'll earn interest on the loan - often at higher returns than banks usually get.
Millionaire Mob is a former investment banker that hung up his suit and 'deal sleds' to focus on ways to travel the world, build great relationships and learn. I am looking to help others learn passive income techniques, invest in dividend growth stocks, earn travel rewards and achieve financial freedom. I increased my net worth from -$60,000 (yes, negative) to over $500,00 in 5 years. I used Personal Capital to track my net worth. I love their platform.
The main idea behind the new passive income rules is to create a system that taxes businesses proportionally to their overall size and income amount. If you’re mostly dealing with smaller startups and family-run businesses, these new passive income rules will probably have little effect, and may even allow companies more freedom to grow their business.

You will get a good gauge of the market when you release your app. It’s analogous to going fishing. You have to cast your app out to see if anything bites. Once you get a few bites, you can start adding a few new features to improve your app passive income. A couple bells and whistles. Finally, start paying attention to feedback. The best way to set yourself up for success with both analytics and feedback are to integrate them both before releasing your app.


Yes, even once you have created your passive income machine, it still needs some attention. Just like a car, it needs to be maintained.  Granted you won’t need to spend 40+ hours a week on it, but spending a few hours a week or even a month will still be necessary to manage your business.  Continue to watch your cash flow, reinvest some of it in your business, and enjoy the rest!  Managing your business will help you keep the passive income machine running.


However, equipment leasing doesn’t include the leasing of master sound recordings and similar contractual arrangements for tangible or intangible assets associated with literary, artistic, or musical properties, such as books, lithographs of artwork, or musical tapes. A closely held corporation can’t exclude these leasing activities from the at-risk rules nor count them as equipment leasing for the gross receipts test.
Who cares, especially when very conservatively, the ultimate passive income includes a six digit or more base lease, plus an estimated additional six digits or more for rate increases and another six digits for more for various smaller and one bigger technology increase at 25 years. All four (base, rate, smaller and mega technology increases) combined, certainly could yield much more depending upon inflation, rate increases and technology increases?
If you inherited property from a decedent who died in 2010, special rules may apply if the executor of the estate files Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. For more information, see Pub. 4895, Tax Treatment of Property Acquired from a Decedent Dying in 2010, which is available at IRS.gov/pub/irs-prior/p4895--2011.pdf.
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Great breakout of some common items that are (mostly) accessible to individuals. My biggest issue with p2p is the ordinary interest it generates and the ordinary tax that we have to pay. That really takes a bite out of the returns. Fortunately, I opened an IRA with one of the providers to juice the return with zero additional risk. 6-8% nominal returns over a long period of time will make me very happy. It should end up as 5-7% of the portfolio anyway, so nothing too significant.

Herbert and Wilma are married and file a joint return. Healthy Food, an S corporation, is a grocery store business. Herbert is Healthy Food's only shareholder. Plum Tower, an S corporation, owns and rents out the building. Wilma is Plum Tower's only shareholder. Plum Tower rents part of its building to Healthy Food. Plum Tower's grocery store rental business and Healthy Food's grocery business aren’t insubstantial in relation to each other.
Almost all of these ideas require starting a personal blog or website. But the great thing about that is that it's incredibly cheap to do. We recommend using Bluehost to get started. You get a free domain name and hosting starts at just $2.95 per month - a deal that you won't find many other places online! You can afford that to start building a passive income stream.
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