Tax-exempt income at the corporate level does flow through to the shareholders.

Name: Tax-exempt income at the corporate level does flow through to the shareholders.
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Tax-exempt income at the corporate level is not subject to income tax, and it does flow through to the shareholders as part of their taxable income on their individual tax returns. This is known as pass-through taxation, and it applies to certain types of business structures, such as S-corporations and limited liability companies (LLCs).

Tax-Exempt Income at the Corporate Level Does Flow Through to the Shareholders