The taxation of flow-through entities allows businesses to obtain a tax result mirroring their economic deal.

Entities (like LLCs) classified as partnerships or S corporations for tax purposes, also known as pass-through entities, offer businesses the opportunity to structure flexible economic deals while paying only a single layer of tax, as opposed to the double layer of tax paid by C corporations. Additionally, pass-through entities are eligible to make use of the section 199A deduction that can reduce their effective tax rates.

Flow-through entities provide opportunities for businesses to create deals capturing both the desired economic and tax outcome. Eide Bailly’s team of experienced tax attorneys and accountants can help you with all phases, from admitting a new partner or shareholder to wrapping up and liquidating a business.