The _____ states that a business entity does not itself owe taxes on income; it only acts as a pass-through for its members to receive income.
A) conduit theory
B) estoppel theory
C) entity theory
D) concession theory
E) aggregate theory

Question

Quizplus · Accepted Answer

The conduit theory holds that a business entity does not owe taxes on income; it acts only as a pass-through for its members to receive income. This means that the income generated by the business entity gets passed through to the members, who are then responsible for paying taxes on that income.

The _____ States That a Business Entity Does Not Itself