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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