With regard to taxation of partnerships, which of the following statements is true?
A) Profits are taxed twice.
B) Each partner is taxed in the same way as a sole trader.
C) Taxes are paid on a partnership's profits, after which each partner pays taxes on his or her share of the profits.
D) A partnership is exempt from taxes.
E) The partnership is taxed as a separate entity.

Question

Quizplus · Accepted Answer

In a partnership, each partner is taxed on their share of the profits, similar to a sole trader, meaning the partnership itself does not pay taxes as a separate entity.

With Regard to Taxation of Partnerships, Which of the Following