Which of the following is TRUE of a partnership and a corporation? A. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice. B. In a corporation, income is taxed at the corporate level; whereas, in a partnership, income is taxed twice. C. Income from both forms of organizations are doubledashtaxed. D. In a partnership, income is exempted from tax up to $10 million; whereas, in a corporation, income is taxed twice.

Question

Nikki

Business

Today, 05:44

Which of the following is TRUE of a partnership and a corporation? A. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice. B. In a corporation, income is taxed at the corporate level; whereas, in a partnership, income is taxed twice. C. Income from both forms of organizations are doubledashtaxed. D. In a partnership, income is exempted from tax up to $10 million; whereas, in a corporation, income is taxed twice.

+1

Answers (1)

Know the Answer?

Darwin Lam · Answer 1

Answer: A. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice.

Explanation: Hi, a corporation is considered a legal entity for tax purposes, so it pays taxes based on the corporate tax rate for their income. But also the shareholders pay taxes based on the individual tax rate for the dividends payments received. There is a double taxation.

A partnership is a collection of individuals that come together, the partners are personally liable for the business's obligations. So, each partner pays taxes based on the individual tax rate for the incomes.