Partners may elect to have the partnership not be a separate taxable entity,so that only the partners are taxed.

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A partnership is not a separate taxable entity by default. However, partners may elect to have the partnership be treated as a separate entity for tax purposes by filing Form 1065. If they choose not to file this form, the partnership's income, deductions, and credits flow through to the partners' individual tax returns.

Partners May Elect to Have the Partnership Not Be a Separate