Definition:
The Internal Revenue Code (IRC) defines general category income as income other than passive income. It also includes income that does not fall into one of the other additional separate categories. In effect, it is a general catch-all category. General category income generally includes:
- Wages, salary, other compensation and overseas allowances of an individual as an employee.
- Income earned in the active conduct of a trade or business.
- Gains from the sale of inventory or depreciable property used in a trade or business.
- Financial services income if it is derived by a financial services entity.
- High-taxed income that would otherwise be passive income.
- All other income that does not fall into one of the other separate limit categories (which inoperation constitutes the majority of foreign income) falls into the general limitation category.