M4 - Items From Other Entities

Question 1

Flow-Through Business Entities

Answer 1

A flow-through entity reports income on a tax return filed for informational purposes only. The income flows through to the owners and is taxed at the individual owner level, regardless of whether or not the amounts are withdrawn by the owner.

Question 2

Partnership or Limited Liability Company (LLC)

Answer 2

Flow-through entity that reports income on Form 1065.

Question 3

S Corporation

Answer 3

Flow-through entity that reports income on Form 1120S.

Question 4

Sole Proprietorship

Answer 4

Flow-through entity that reports income on Form 1040, Schedule C.

Question 5

C Corporation

Answer 5

A separate taxpaying entity that reports income on Form 1120.