The three categories are as follows:• Category 1: Gross income from interest, dividends, annuities, royalties, and rents, which is not derived in the ordinary course of an active trade or business.• Category 2: Gross income from a trade or business that is a passive activity or a trade or business of trading in financial instruments or commodities.• Category 3: Net gain (to the extent taken into account in computing regular taxable income) attributable to the disposition of nonbusiness property and property other than property held in a trade or business to which the 3.8% NIIT does not apply.

3)  Everyone knows with Franchises that you pay Royalties to Corporate. 

@Jocelyn DoumaniCollect royalties...or just enforce your lease that if he breaks the law you can evict.

I also make over 6 figures a year outside of crypto because I have royalties constantly incoming along with other sources of income.

And if that happens then the whole thing blows up.If you want something recession proof then you need to be investing in an asset class that is uncorrelated with business cycles (litigtion finance, life settlements, royalties, etc) and even then usually you're only getting at best "extremely recession resistant".

REAL ESTATE is an investment, just like precious metals, stocks, royalties, equipment, oil, gas, etc I assume you work for a company that only sells stocks and bonds thus the tunnel vision-not your fault.

Likewise, being a mortgage broker does not qualify (this one was actually just tested in court in 2017)For the bucket of losses, all passive losses get netted together in a given year, so all rental properties, Oil & Gas Royalties, etc - all get lumped together for the purposes of determining whether you've got an overall Net Passive Loss. 

Passive income comes from rent, LP profits, and royalties.

Hopefully the price war with Putin and the Saudis ends soon. sources: New Record: Texas Oil and Gas Industry Paid $16.3 Billion in Taxes and State Royalties in 2019, Most in Texas HistoryCertifying the 2018-2019 Texas State Budget

The value to the buyer can add up to a very sizeable amount of money; typically pays the up-front lender fee to lower the interest rate, which results in accumulating paid interest savings for the buyer as long as the buyer owns the property, or for the life of the loan; may add up to many tens of thousands of dollars; make sure you check the fine print of the lender's loan lock provisions; be sure your seller's money is truly paying down the loan rate as opposed to paying other lender charges to the buyer.  3.Seller-Funded Temporary BuydownsBuydowns can also be structured to adjust the buyer-paid interest rate for a limited number of years; can cover the first two, three or four years or more of the buyer's loan; allows your seller to reduce the buyer's ongoing loan cost (monthly payment) considerably.4.Owner FinancingA willing seller may be able to keep their selling price intact by offering financing to a buyer; for a seller who needs to sell as soon as possible for the best possible price; expands the potential market for buyers to those who might not qualify with a lender for any number of reasons relating to their credit, verifiable income, or other issues; seller creates an 'investment" that can produce an annuity with a very good rate of return for many years; seller needs to become very well educated on how to qualify a potential buyer (how to get credit, income, debt ratio, and other accurate personal historical data on the buyer-and how to verify that data); seller needs legal advice to review contract documents, as well as title and escrow services to conduct a title search and closing; buyers attracted to seller financing may have income sources including part- time work, bonus income, royalty income, dividend and interest income from investments, or they may be newly self employed; seller who finances needs to get a substantial down payment and ensure that the property is adequately insured by the buyer and that initial property taxes are pre-paid and a tax payment plan is established; if the buyer stops paying, the seller will have to proceed like a bank or other lender and foreclose on the buyer. 5.Contract for DeedA contract for deed agreement to purchase is similar to a seller-financed purchase.