Unraveling the Complexities of Pass-Through Corporations A Step-by-Step Analysis

Pass-through taxation is a major benefit for Texas S-corporations. This tax structure allows business income to "pass through" directly to the shareholders, ... Pass-through entities are remarkably diverse and account for a large majority of all businesses. They include sole proprietorships (owned by a ... S corporations file federal income taxes using Form 1120S, U.S. Income Tax Return for an S corporation. Each shareholder receives a Schedule K-1 ... A domestic or foreign general partnership, joint venture, limited partnership (LP), limited liability partnership (LLP), limited liability company (LLC), ... Both S corps and LLCs are known as pass-through entities because they pay no corporate taxes. Instead, they pay their shareholders, who become responsible for ... Pass-through entities include sole proprietorships, partnerships, S corporations and LLCs that have not elected to be taxed like a C-corp. This designation allows the profits of the corporation to “pass through” the business onto the shareholders or owners. Accordingly, the profits ... An S corporation is a corporation that elects to be taxed as a pass-through entity. Income, losses, deductions, and credits flow through to the shareholders. Pass-through businesses include sole proprietorships, partnerships, limited liability companies and S-corporations. 80% of family businesses and generationally owned businesses, are organized as a Pass-Through Entity such as Limited liability company (LLC) ...