FindLaw Legal Dictionary
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: not involving, deriving from, or requiring effort or active participation [imposed a duty not to interfere]
: of, relating to, or being business activity in which the investor does not have immediate control over the income-producing activity [ income] [ losses] NOTE: Any rental activity is designated a passive activity under the Internal Revenue Code. Investment income is not considered income from a passive activity.
Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.