In a sole proprietorship,the profits earned by the business are:
A)Taxed as income for the business,but is exempt from the personal income tax paid by the owner.
B)Taxed at the lowest corporate rate.
C)The property of the owner,except for taxes owed to the government.
D)Tax-free if the appropriate exemption is filed with the local government.

Question

Quizplus · Accepted Answer

In a sole proprietorship, the owner and the business are considered one and the same entity. Therefore, any profits earned by the business are considered the property of the owner, except for taxes owed to the government. The profits are taxed as personal income for the owner, and not at the corporate rate. There is no exemption that makes the profits tax-free.

In a Sole Proprietorship,the Profits Earned by the Business Are