For Federal income tax purposes, a distribution from a partnership to a partner is treated the same as a distribution from a C corporation to its shareholders.

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For Federal income tax purposes, a distribution from a partnership to a partner is generally not treated the same as a distribution from a C corporation to its shareholders. Partnerships are pass-through entities, meaning the income, deductions, gains, losses, and credits flow through to the partners and are taxed at their individual rates, whereas C corporations are taxed at the corporate level and distributions (dividends) to shareholders are taxed again at the individual level.

For Federal Income Tax Purposes, a Distribution from a Partnership