BizTerm Definition
Pass Through Entity
Short Definition
LLC, S Corp., Partnership, or Sole Prop.
Full Definition

For Tax Purposes

The term "Pass Through Entity" refers to a busines structure where by the net income or net loss of the business, "passes through" to its owner(s) and are usually accounted for on the owner(s)' personal taxes.

The most common pass-through business structures include:
Limited Liability Companies or LLC's
S Corporations
> Partnerships 
> Sole Proprietorship

In the News

Pass-Through Entities have been in the news lately because of the 2018 Tax Cuts and Jobs Act has granted "pass through" structures a new 20% deduction against Qualified Business Income.

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