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PASS THROUGH TAXATION

TheLaw.com Law Dictionary & Black's Law Dictionary 2nd Ed.

As opposed to C corporations, the ability to have income pass through sole proprietorships, partnerships, S-Corporations and other entities so that the income may be included in the income taxes of the owners of the business. This is as opposed to regular corporations which are taxed on profits and dividends received by shareholders are taxed on the shareholders’ tax returns.

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