Which of the following statements concerning taxation is accurate?
A) Partnerships pay state income taxes but not federal income taxes.
B) Corporations pay federal income taxes but not state income taxes.
C) Corporations pay federal and state income taxes.
D) Only the owners must pay taxes on corporate income.

Question

Quizplus · Accepted Answer

Corporations pay both federal and state income taxes. Partnerships are pass-through entities and do not pay income taxes themselves; instead, the profits and losses flow through to the individual partners who report the income on their personal tax returns. Only the owners of a corporation who receive dividends or sell their stock at a profit must pay taxes on that income.

Which of the Following Statements Concerning Taxation Is Accurate