What is considered rental income?

Rental income specifically refers to the money received for leasing property to another party. This means that when an individual or a business rents out a property—such as residential homes, commercial spaces, or land—they generate rental income. This income is typically reported on tax returns and can be subject to various tax rules.

In contrast, income from selling property is categorized as capital gains rather than rental income because it pertains to the profit made from the sale of an asset. Income from home-based businesses involves income generated from services or products sold rather than from leasing or renting property. Similarly, income from investments in stocks relates to gains and dividends earned from financial investments, not rental agreements.

Understanding the distinction of rental income is important for accurate tax reporting and comprehension of income sources in real estate transactions.