Asked by Janiel Samuels on May 17, 2024
Verified
A partnership
A) has only one owner.
B) pays taxes on partnership income.
C) must file an information tax return.
D) is not an accounting entity for financial reporting purposes.
Information Tax Return
A type of tax document used to report various types of income, other than wages, salaries, and tips, to governmental tax agencies.
Accounting Entity
An economic unit with clearly defined boundaries for which financial transactions are recorded, separate from its owners or other business units.
- Acknowledge the tax and informational reporting requirements of partnerships.
Verified Answer
MA
mezhoura allilicheMay 22, 2024
Final Answer :
C
Explanation :
A partnership is a business structure where two or more individuals share ownership and manage the business. The partnership itself does not pay taxes on its income; instead, the partners report their share of the profits or losses on their individual tax returns. However, the partnership must file an information tax return with the IRS to report its income, deductions, and other financial information. Additionally, a partnership is considered an accounting entity for financial reporting purposes and must maintain separate financial records from its individual partners.
Learning Objectives
- Acknowledge the tax and informational reporting requirements of partnerships.