Income generated from investments is considered to be:

Income generated from investments is categorized as passive income because it typically involves money earned from sources in which the investor is not actively involved in day-to-day operations. This classification primarily includes earnings from stock dividends, rental properties, and interest from savings or investment accounts. The essence of passive income lies in its nature of requiring minimal effort to generate compared to earned income, which is directly tied to active work or services provided.

Choosing 'passive income' acknowledges that the individual is leveraging capital to yield returns without continuous personal involvement, differentiating it from ordinary income earned through employment or active business participation. Understanding this distinction is important for tax purposes, as passive income may be subject to different regulations compared to other types of income.