There are three forms of income: Active, Passive and Portfolio. So assuming you are on the same sheet of music as I am, then to answer your question…passive income is derived from rental properties,or any operation wherein you are not directly involved (limited partnerships, etc).
It does not offset your taxable income, and if you take losses in your passive income allotments, it CERTAINLY doesn’t offset your taxes. (believe me on this!!)
Without knowing what you are doing, I couldn’t begin to offer suggestions to anything specific to your current industry. Perhaps you could look at purchasing low-income properties and renting them out. Generally, the property is distressed due to location and condition. If you apply for HUD, you could get subsides to maintain the property and if you have a really creative accountant you may be able to get your Passive Income to be allocated as a Community Investment.
I am not suggesting ANY of this…but am just saying.
Good Luck!