Chartered Retirement Planning Counselor (CRPC) Practice Exam 2026 - Free CRPC Practice Questions and Study Guide

Unearned investment income typically refers to income that is generated from investments rather than from active participation or employment. This type of income can encompass various forms, including dividends, interest, and realized gains from the sale of assets.

Net capital gains are realized profits that occur when an asset, such as stocks or real estate, is sold for more than its purchase price. The gains are considered unearned income because they are not derived from active work or employment but rather from the investment of capital. This distinction makes net capital gains an integral component of unearned investment income.

The other options, while related to income, are not classified as unearned investment income in the same context. Interest from tax-exempt bonds is also a type of income but may not always be categorized under unearned income, particularly concerning specific tax treatments. Life insurance proceeds do not qualify as unearned investment income since they are typically paid out upon the death of the insured and are not derived from investment activity. Income from qualified plans, such as pensions or retirement accounts, is often treated differently in tax contexts, focusing more on earned income and benefits rather than investment income itself.

Thus, the correct answer accurately represents the nature of unearned investment income by highlighting net capital gains as an