Question

A partnership's ordinary business income is taxed in the following way: The income earned by the...

A partnership's ordinary business income is taxed in the following way:
The income earned by the partnership is taxed to the entity and the partnership is responsible for paying any tax due.  
Only the managing partners are individually taxed in a general partnership.  
All partnership income is passed through to the individual partners who pay tax on their share of the income.  
The ordinary income is always considered self-employment income to each of the partners in all types of partnerships.  
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Answer #1

Corrects Answer ---All partnership income is passed through to the individual partners who pay tax on their share of the income.  

Explanation

A partnership Firm does not pays taxes on its income rather its income is distributed to partners and those partners pays taxes on the income distributed to them along with other income. The Partnership income flows through all the partners and shown in their Tax Returns.

Even though partnership is not required to pay income taxes but it still needs to file Its Income Tax Return.

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