What is passive income for a real estate agent that is not a rental?

Publication 925 names two kinds of passive activity: trade or business activities in which you don't materially participate during the year, and rental activities, even when you do materially participate, unless you're a real estate professional (IRS, April 2026).

You materially participate if you meet any one of seven tests, and the first is working in the activity for more than 500 hours in the year (IRS Publication 925, April 2026). If you own an activity as a limited partner, you generally aren't treated as materially participating unless you meet the first, fifth or sixth test (IRS Publication 925, April 2026).

So, setting rentals aside, passive income for an agent means income from a business you own all or part of but don't work in enough to materially participate.

No. Passive activity income doesn't include personal service income, which the IRS defines to include commissions and self-employment income from businesses you materially participate in (IRS Publication 925, April 2026).

It also excludes income from intangible property, such as a copyright or a literary work, when your personal efforts significantly contributed to creating it (IRS Publication 925, April 2026). A book, a course or a script you wrote yourself falls under that line, however little work it takes once it's selling.

The IRS treats interest, dividends, annuities and royalties not earned in the ordinary course of a business as portfolio income, along with gains on property held for investment, and keeps them out of passive activity income (IRS Publication 925, April 2026).

Qualified dividends are taxed at the lower capital gain rates (IRS, September 2026). For 2026, a single filer's net capital gain is generally taxed at 0% within the first US$49,450 of taxable income and at no more than 15% up to US$545,500, with 20% above that (IRS Revenue Procedure 2025-32, October 2025). Gains on assets held one year or less are short-term and taxed as ordinary income (IRS, September 2026).

Above US$200,000 of modified adjusted gross income for a single filer, or US$250,000 for a married couple filing jointly, the 3.8% net investment income tax can also apply (IRS, July 2026). It covers interest, dividends, capital gains, rental and royalty income, and it excludes most self-employment income (IRS, July 2026).

A passive activity loss, meaning passive deductions above passive income, generally isn't allowed for the year, apart from a special allowance of up to US$25,000 of loss for rental real estate you actively participate in, which shrinks by 50% of your modified adjusted gross income above US$100,000 and is gone at US$150,000 (IRS Publication 925, April 2026). Deductions disallowed one year carry over to the next (IRS Publication 925, April 2026), so a loss from a business you don't work in waits for passive income to absorb it.

If you also own rentals, your brokerage hours can matter. The IRS lists brokering among real property trades or businesses, and a real estate professional must perform more than half of their personal services, and more than 750 hours, in real property trades or businesses they materially participate in (IRS Publication 925, April 2026). Rentals in which a real estate professional materially participates aren't passive (IRS, April 2026).

The CRA has you report interest and other investment income as part of your total income, even without a slip (CRA, January 2026).

Dividends from taxable Canadian corporations are grossed up, to 138% of the amount received for eligible dividends and 115% for other dividends, and you may claim a dividend tax credit (CRA, June 2026).

Half of a capital gain is taxable, as the CRA's own example for a 2025 sale shows (CRA, February 2026), and the proposed increase in that inclusion rate was canceled (Prime Minister of Canada, March 2025; CRA, June 2026). Income earned inside a TFSA, including investment income and capital gains, is generally tax-free, even when withdrawn (CRA, June 2017); the 2026 TFSA limits are on How do real estate agents save for retirement without a 401(k)?