Investor Glossary-unearned incomeInvestor Glossary-unearned
incomeInvestor Glossary-unearned incomeInvestor Glossary-
unearned incomeInsightful stock market charts - Click here
Unearned Income  The HTML to link to this page  Unearned income
is any income that comes from sources other than employment
(work). Examples of unearned income include interest from bonds,
savings accounts, and other sources; dividends from stocks;
capital gains from selling investments at a profit; and income
from rental property. Some unearned income is taxed at the
regular income tax rate; other unearned income is taxed at a
lower rate, often to encourage further investment. Proceeds from
retirement plans and Social Security payments are also treated
as unearned income, even though they derive in part from the
earned income of an individual's prior employment. Gifts,
inheritances, royalties, in-kind support, awards, and prizes are
considered unearned income. As such, they are treated
differently from earned income for tax purposes.