Which one of the following statements regarding partnership taxation is incorrect?
A)A partnership is not a taxable entity for Federal income tax purposes and is not required to file a return.
B)Partnership income is comprised of ordinary partnership income or loss and separately stated items.
C)A partnership is required to file a return with the IRS.
D)A partner's profit-sharing percent may differ from the partner's loss-sharing percent.
E)All of these statements are correct.

Question

Quizplus · Accepted Answer

A partnership is actually required to file a return with the IRS, even though it is not a taxable entity. The return is used to report the partnership's income, deductions, gains, losses, and credits to the IRS, but the actual tax liability is passed through to the individual partners on their personal tax returns.

Which One of the Following Statements Regarding Partnership Taxation Is