Flow-through entities are named as such because they are taxed continuously.

Name: Flow-through entities are named as such because they are taxed continuously.
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Quizplus · Accepted Answer

Flow-through entities, such as partnerships and S corporations, are not taxed at the entity level. Instead, the profits and losses flow through to the owners' personal tax returns and are taxed there. However, the tax liability is not continuous but rather occurs annually when tax returns are filed.

Flow-Through Entities Are Named as Such Because They Are Taxed