Income taxes to a partnership:
A)Are an obligation of the partnership.
B)Are an obligation to each partner only when cash is received.
C)Are an obligation to each partner based on his or her share of profits.
D)Are not an obligation to each partner since a partnership does not pay tax.

Question

Quizplus · Accepted Answer

Each partner is responsible for paying income taxes on their share of the partnership's profits. The partnership itself does not pay taxes, but rather each partner includes their share of the partnership's profits on their individual tax returns. Therefore, income taxes to a partnership are an obligation to each partner based on his or her share of profits.

Income Taxes to a Partnership