What is Pass-through taxation?
Profit is taxed on the owner's personal return rather than at the entity level, which avoids the double taxation a C corporation faces.
Legal
The definition
When business profits are taxed on the owner's personal return rather than at the company level.
Where it comes up
This shows up in the structure comparison on this site.
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Questions people ask
What is Pass-through taxation?
When business profits are taxed on the owner's personal return rather than at the company level. Profit is taxed on the owner's personal return rather than at the entity level, which avoids the double taxation a C corporation faces.