Question

How is taxation handled in partnerships? Group of answer choices Partnerships are exempt from paying taxes....

How is taxation handled in partnerships?

Group of answer choices

Partnerships are exempt from paying taxes.

Partnerships are taxed based on the number of shareholders.

Partnerships pay taxes when submitting the partnership tax return.

Partnerships report their share of profits as partnership incomes.

Partners pay taxes at the income tax rate for individuals.

s.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Partners report their share of profits as partnership income, and

Partners pay taxes at the income tax rate for individuals.

Explanation:

The partnership business is not taxed separately and the profits / losses of partnership business is distributed (with or without actual distribution) among the partners in the respective ratios as per the terms of partnership agreement. Hence, the liability to pay income tax on partnership profits pass on to the partners of the firm and the partners need to pay taxes as per their individual income tax rate. The partnership firm only needs to file its income tax return informing the amount of profits / losses distributed among the partners without having to pay any taxes on the reported profits.  

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following is NOT a feature of individual taxation? Group of answer choices Individuals...
Which of the following is NOT a feature of individual taxation? Group of answer choices Individuals pay taxes on wages and salaries, on investment income, and on the profits of proprietorships and partnerships. Individuals face progressive tax rates. Long-term capital gains are taxed at a lower rate than ordinary income. Short-term capital gains are taxed at the same rate as ordinary income. Interest on both corporate and municipal bonds is subject to Federal taxation. Flag this Question Question 82 pts...
Question 25 State sales taxes tend to be regressive in that higher income-people save and invest...
Question 25 State sales taxes tend to be regressive in that higher income-people save and invest rather than consuming all their income like lower-income people, so they pay a lower portion of their income on sales taxes which are consumption based. To offset this regressivity, most state sales tax rules do what? Base sales tax rate on the level of income of the purchaser. Rebate excess sales taxes paid to low income taxpayers on application. Exempt certain necessities that all...
Most guaranteed payments from partnerships and wages from S Corporations are subject to the full 15.3%...
Most guaranteed payments from partnerships and wages from S Corporations are subject to the full 15.3% FICA tax. Flow-through income from partnerships is sometimes subject to FICA tax while S corp flow-through income is not subject to FICA tax. Cash distributions are not subject to tax, nor are they a deductible expense. Services contributed to a partnership are often compensated through guaranteed payments from the partnership. These are treated as salary payments on which the partner receiving them must pay...
1. Which of the following is not a correct statement regarding the advantage of the partnership...
1. Which of the following is not a correct statement regarding the advantage of the partnership entity form over the C corporation form? a. Partnership income is subject to a single level of taxation; corporate income is double taxed. b. Partners in a general partnership have less personal liability for entity claims than shareholders of a C corporation. c. A partnership typically has easier administrative and filing requirements than does a C corporation. d. Partnerships may specially allocate income and...
13. Which of the following statements is CORRECT? Group of answer choices One of the disadvantages...
13. Which of the following statements is CORRECT? Group of answer choices One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt. Sole proprietorships are subject to more regulations than corporations. In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner. Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones. Corporations...
Compared to wage income, self-employment income: Group of answer choices d. is subject to SECA taxes...
Compared to wage income, self-employment income: Group of answer choices d. is subject to SECA taxes which must be paid entirely by the taxpayer a. is always subject to higher social security and Medicare taxes. c. offers no deductions for SECA tax paid. b. has a lower cap on social security and Medicare taxes. The Medicare Surtax is: Group of answer choices b. a 0.9% surtax that is added to the FICA tax on wages and/or self-employment income that exceeds...
This is just a discussion post from my classmate. I just need to respond. Based off...
This is just a discussion post from my classmate. I just need to respond. Based off of what is written, please answer with a simple analysis of what's written. (example: Interesting post, I see that...) 1. Discuss each of the following business entity types including ownership, financial and legal and tax issues related to each type. Sole Proprietorship A sole proprietorship is owned by only one person and the firm and the owner are considered one and the same from...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4 Q2 A variety of investments is available in the marketplace. What types of investors (clienteles) are most appropriate for (a) municipal bonds (b) hi growth, low dividend stocks (c) lower growth, high dividend stocks? Chapter Summary Different economic activities are taxed differently, even if undertaken in the same organizational form. The unequal taxation of returns affects the demand for investment and thereby affects the...
11. Bread Corporation is a C corporation with earnings of $150,000. It paid $60,000 of dividends...
11. Bread Corporation is a C corporation with earnings of $150,000. It paid $60,000 of dividends to its sole shareholder, Gerald. Gerald also owns 100% of Butter, an S Corporation. Butter had net taxable income of $40,000 and made a $30,000 distribution to Gerald. What total income will Gerald report from Bread and Butter’s activities?        $90,000        $190,000        $150,000        $100,000 12. At the first of the year, Arch and Bean contribute cash equally...
2 . Identify which of the following statements is true: If an S Corporation has no...
2 . Identify which of the following statements is true: If an S Corporation has no accumulated earnings and profits, the amount distributed to a shareholder will not increase the shareholder's basis in the stock        If a C Corporation does not distribute its income to its shareholders, double taxation of the income will occur.        C Corporation operating losses are deductible by the individual shareholders        S Corporation operating losses are never deductible by the individual...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT