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All of the following are considered pass-through entities EXCEPT: 1 ) Partnerships 2) Tax-exempt organizations 3)...

All of the following are considered pass-through entities EXCEPT: 1 ) Partnerships 2) Tax-exempt organizations 3) Subchapter S corporations 4) Estates and Trusts.

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Answer #1

The correct answer for the question is Option B - Tax exempt Organizations. Tax exempt organizations are not pass through entities and are organization that generally qualify for the exemption of the Federal Income tax. Hence, this is the correct answer.

Option A, Option B and Option C are incorrect because these are considered pass through entities as the entities "passes through" the income of the business to the owners. In other words, double taxation is avoided and the income is ultimately taxed on the owners. Parternships, Subchapter S corporations and Estates and Trusts are all pass through entities and are incorrect.

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