In the United States, partnership profits are taxed at the business level and then are taxed again as personal income in the form of dividend payments.

Question

Quizplus · Accepted Answer

Partnership profits are not taxed at the business level. Instead, they are "passed through" to the individual partners who report the profits on their personal tax returns and pay taxes on them at their individual marginal tax rates. This means there is no double taxation of partnership profits as both the business and the individual partners are not taxed separately on the same income.

In the United States, Partnership Profits Are Taxed at the Business