Subchapter S avoids double taxation and income is passed through the corporation and only taxed at the individual level.

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This statement is true. Subchapter S corporations are known as "pass-through entities" because the income is passed through the corporation to the individual shareholders and is only taxed at the individual level. This avoids double taxation that can occur with traditional C corporations, where the corporation's profits are taxed at the corporate level and then again at the individual level when shareholders receive dividends or capital gains. This is correct. Subchapter S corporations are also known as "pass-through" entities because the corporation's income and losses "pass through" to its owners/shareholders, who report the income or losses on their individual tax returns. This avoids double taxation at both the corporate and individual levels.

Subchapter S Avoids Double Taxation and Income Is Passed Through