Question

A partnership's income, losses, deductions, and credits are:

a. Taxed at the entity level.
b. Passed through to the partners for filling on their individual schedules C.
c. Passed through to the partners using schedule k-1 (Form 1120)
d. Passed through to the partners using schedule k-1 (Form 1065)

Answer 1

Based on the information available in the question, we can answer as follows:-

The correct answer for the question is Option D - Passed through to the partners using Schedule k-1 (Form 1065). A partnership firm generally files Schedule K-1 (Form 1065) with the IRS to report the partnership's income, losses, deductions and credits.

Option A is incorrect as the partnership is not taxed at the entity level.

Option B is incorrect as the income,losses, deductions and credits are passed through using schedule k-1 and not directly as mentioned within this option.

Option C is incorrect as Form 1065 and not Form 1120 that is used to pass through to the partners.

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