Flow-through Entities Entail taxation, only at the ownership level. This single level of taxation, is achieved by: (1)exempting the entity from taxation (2)passing income, deductions, losses, and credit through to the owners, and (3 )adjusting the basis of the owners'interest in the entityFlow-through Entities: • Entail taxation, only at the ownership level. This single level of taxation, is achieved by: – (1) exempting the entity from taxation – (2) passing income, deductions, losses, and credit through to the owners, and – (3) adjusting the basis of the owners’ interest in the entity