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A flow-through entity (FTE) is a legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners. Flow-through entities are also known as pass-through entities or fiscally-transparent entities .
In addition to the absolute pass-through that uses incremental values (i.e., $2 cost shock causing $1 increase in price yields a 50% pass-through rate), some researchers use pass-through elasticity, where the ratio is calculated based on percentage change of price and cost (for example, with elasticity of 0.5, a 2% increase in cost yields a 1% increase in price).
The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. As a business entity, an LLC is often more flexible than a corporation and may be well-suited for companies with a single owner. [5]
Partnerships are "flow-through" entities for United States federal income taxation purposes. Flow-through taxation means that the entity does not pay taxes on its income. Instead, the owners of the entity pay tax on their "distributive share" of the entity's taxable income, even if no funds are distributed by the partnership to the owners.
Pass through device (automotive) Passthrough, a term used to describe the use of cameras with head-up displays to render augmented reality objects in front of a user's vision; Passthrough (architecture), an opening between the kitchen and the dining room; Pass-through (economics), offsetting a change in costs by changing prices Exchange-rate ...
If a business offers employees an ICHRA, they can use it to cover qualifying health expenses. The difference between HRAs and ICHRAs is what they cover. ICHRAs can reimburse health care premiums ...
The federal government monitors the federal aid provided to any recipient and requires all pass-through entities to monitor the aid they pass on. Noncompliance of a federal regulation on the part of the sub-recipient may also be attributed to the pass-through entity because it is still responsible for the funds it passed on. [citation needed]
As a consequence of their pass-through status, holding MLPs in tax-exempt accounts may generate Unrelated Business Income Tax (UBIT). [2] To encourage tax-exempt investors , some MLPs set up C corporation holding companies of limited partner which can issue common equity .