Flow-Through Entity

AAA

DEFINITION of 'Flow-Through Entity'

A legal business entity that passes income on to the owners and/or investors. Flow-through entities are a common device used to limit taxation by avoiding double taxation. Only the investors/owners are taxed on revenues, not the entity itself.

INVESTOPEDIA EXPLAINS 'Flow-Through Entity'

Also known as pass-through entities, flow-through entities are commonly grouped into limited, general and limited liability partnerships, along with income trusts and limited liability companies. Although flow-throughs are considered non-entities for tax purposes, U.S. law still requires flow-through entities to file an annual K-1 statement.

RELATED TERMS
  1. Commercial Mortgage-Backed Securities ...

    A type of mortgage-backed security that is secured by the loan ...
  2. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  3. Pass-Through Security

    A pool of fixed-income securities backed by a package of assets. ...
  4. Pass-Through Certificate

    Fixed-income securities that represent an undivided interest ...
  5. Peter Pan Syndrome

    A regulatory environment in which firms prefer to stay small ...
  6. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
Related Articles
  1. 3 Retirement Plan Moves To Make Before ...
    Taxes

    3 Retirement Plan Moves To Make Before ...

  2. Introduction To Multi-Discipline Accounts
    Investing Basics

    Introduction To Multi-Discipline Accounts

  3. Pros And Cons Of Offshore Investing
    Personal Finance

    Pros And Cons Of Offshore Investing

  4. 10 Money-Saving Year-End Tax Tips
    Taxes

    10 Money-Saving Year-End Tax Tips

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center