ordinary income

Ordinary Income

Income derived from regular business activities.

Investopedia Commentary

Ordinary income doesn't include capital gains. It is important for tax purposes as capital gains are taxed at a different rate.

See also: Income

ordinary income

Income that does not qualify for special tax treatment. Wages, dividends, and interest are ordinary income.

Main Entry: ordinary income
Function: noun
: income that does not derive from the exchange or sale of capital assets or property used in one's trade or business and that for individuals includes compensation, interest, dividends, and short-term capital gains