A partnership of only limited liability partners will pay higher income taxes.

Question

Quizplus · Accepted Answer

Limited liability partners are not personally responsible for business debts and liabilities, but they still share in the profits and losses of the partnership. The partnership itself does not pay income taxes; instead, each partner reports their share of the partnership's income on their own tax return and pays taxes on it at their individual tax rate. Therefore, whether a partnership has limited liability partners or not does not directly impact the income tax rate the partnership pays.

A Partnership of Only Limited Liability Partners Will Pay Higher