You need to determine if it is a business or a hobby. If it is a business, it is subject to self-employment tax. If it is hobby, you report income as "interest" [edited] but can't deduct expenses.
https://www.thetaxadviser.com/issues/2013/jul/tpp-july2013-story-02.html
In tax terminology, "Passive" and "Active" are not opposites. If you Materially Participate in this business, it is not passive.
