Which of the following statements about a partnership is true?

Question

Quizplus · Accepted Answer

Partnerships are pass-through entities, meaning that the profits and losses of the partnership are passed through to the individual partners and are taxed on their personal tax returns. Partners are taxed on their share of the partnership's income, even if it is not distributed to them. Therefore, option D is correct. Option A is incorrect because a partnership is not a taxpaying entity. Option B is also incorrect because partners are taxed on their share of income, not on distributions. Option C is incorrect because partners are not considered employees of the partnership.

Which of the Following Statements About a Partnership Is True