Partners in a partnership are taxed on the partnership income, not the amounts they withdraw from the partnership.

Question

Quizplus · Accepted Answer

Partnerships are pass-through entities, meaning the income is not taxed at the partnership level but instead passes through to the partners who include their share of the partnership income on their personal tax returns. Therefore, they are taxed on the partnership income, not the amounts they withdraw from the partnership.

Partners in a Partnership Are Taxed on the Partnership Income