Business Income vs. Nonbusiness Income

Business income is income from your trade or business transactions and activities. Some income from tangible and intangible property is also included as business income if the acquisition, use, management, or disposition of the property makes up an integral part of your business operations.

Any other income is nonbusiness income, and you’ll need evidence showing that those earnings are classifiable as such. You may have more than one regular trade or business to consider when determining whether income is business or nonbusiness income.

There are no specific types of income that fall into business income or nonbusiness income because the classifications depend on what type of trade or business you’re in. For example, rental income is a common type of nonbusiness income. However, if you’re in the business of renting personal property, then rental income would be considered business income.

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