### Question
How is the term passive income defined?


### Answer
The term **passive income** is defined in *26 U.S.C. § 1297* as the following:

> any income which is of a kind which would be foreign personal holding company income as defined in section 954(c)

#### Citation:
  - *26 U.S.C. § 1297*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART VI-TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES > Subpart D-General Provisions**

