What is considered business income?

Elle N — Tue, 24 Feb 2026 07:03:18 GMT

I take distributions from an inherited IRA. Is this considered business income or some other kind of income? Thank you!

Re: What is considered business income?

KochuK — Wed, 30 Aug 2023 19:23:02 GMT

Hi Elle N, thanks for posting the question.

A distribution from an inherited IRA is not business income, which is reflected by Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. to be reported on Form 1040, line 4a, 4b IRA distribution and taxable amount.

In general, business income refers to "gross receipts from your trade or business" which includes Form 1099-NEC nonemployee compensation issued by the payors. Business income is reported on Schedule C, part I Income.

https://www.irs.gov/pub/irs-dft/f1040sc--dft.pdf

https://www.irs.gov/pub/irs-dft/i1040sc--dft.pdf

IRS defines "Trade or Business" - The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services.

https://www.irs.gov/charities-non-profits/trade-or-business-defined

Hope the above helps.

Thank you,

Kitty

topic What is considered business income? in Self employed

What is considered business income?

Re: What is considered business income?