FONCE-3 - Entity Types That May Qualify for the FONCE Exemption

No type of corporate entity, including an S corporation, can qualify for the FONCE exemption.

A Limited Liability Company (LLC) and limited partnership are non-corporate entities that may qualify for the FONCE exemption if all other requirements are met.  For example, an LLC or LP must be at least 95% owned by a family member (an individual that is a natural person) and meet the passive income test.

Reference: Tenn. Code Ann. § 67-4-2008(a)(11).

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