Meaning & use
passive activities
Last updated
Meanings
nounpluraltechnicalbusinessfinance
Business or investment activities in which a person does not actively manage or work, used especially in tax rules.
Grammar: Used as a plural noun: 'Passive activities include rental properties.' It is not used in the singular in this technical sense.
Patterns
- be considered passive activities
- income from passive activities
- losses from passive activities
The tax law limits how much you can deduct in losses from passive activities.
Rental real estate is often classified as one of the passive activities under the tax code.
She had income from passive activities, such as limited partnership investments.
nounpluralinformal
Things that you do without active effort or involvement, such as watching television or listening to music.
Grammar: Used as a general plural noun: 'Passive activities like reading are relaxing.' Contrast with 'active activities' like sports.
Patterns
- enjoy passive activities
- prefer passive activities
- passive activities such as something
After a long day, I prefer passive activities like watching a movie.
The survey asked about both active and passive activities in their free time.
Reading and listening to music are examples of passive activities.
Common combinations
- passive activity loss
- The IRS has rules about passive activity losses.
- passive income
- Rental income is often considered passive income.
- material participation
- If you materially participate, the activity is not passive.
- passive investment
- He made a passive investment in a limited partnership.
- active activity
- Active activities like running require more energy.
Synonyms and how they differ
- inactive pursuits
- This is a more general phrase for things done without much physical or mental effort; it is not a technical tax term.
- passive investments
- This focuses on financial investments where the investor is not involved in management, similar to the tax sense but less specific.
Opposites
Word family
Commonly confused: passive activities or passive voice?
passive activities vs passive voice
This is a grammar term for sentences like 'The cake was eaten.' It is not related to business activities.
Practice
Which sentence uses 'passive activities' correctly in a tax context?
Choose one answer.
In a tax context, 'passive activities' refers to business or investment activities where the person does not materially participate. Option 1 uses the everyday sense, not the tax sense. Option 2 uses the correct technical sense. Option 3 is grammatically wrong. Option 4 is false.
Make it your own
Write a sentence using “passive activities”, then check it and compare it with the examples above.