- “Flow-through entity,” also known as “pass-through entity,” is a term invented for federal income tax purposes. It is not a specific legal entity.
- The term includes a class of entities whose income is not usually taxable to the entity but rather is taxed to the entity’s owner(s).
- An S-Corp, a partnership, and a limited liability company (LLC) that is taxed as a partnership are examples of flow-through entities
- A C-corp is not a flow-through entity.
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