Portfolio Income Law and Legal Definition

Portfolio income means income derived from interest, dividends, royalties, or capital gains by the sale of an investment property, shares of stock, and mutual funds. The income derived from the purchase and sale of securities also constitutes portfolio income. To get a portfolio income, one need not work. Hence, a portfolio income is different from salary and wages. Portfolio incomes are also subject to taxation independently. Both a company and an individual can have a portfolio income. The portfolio income of a publicly-traded company must be listed in their balance sheet. It is the major source of income for people who make investments in higher amounts.