Sandy and Dave formed a law partnership, agreeing to split the income 50:50.The partnership had net income of $100,000.Dave withdrew $35,000 throughout the year, and Sandy withdrew $30,000.Dave and Sandy had no other income.The partnership must pay taxes on income of
A)$0
B)$35,000
C)$65,000
D)$100,000

Question

Quizplus · Accepted Answer

Partnerships themselves do not pay income taxes. Instead, the income is passed through to the partners, who report it on their personal tax returns. Therefore, the partnership itself pays taxes on $0.

Sandy and Dave Formed a Law Partnership, Agreeing to Split