Which one of the following statements regarding partnership taxation is incorrect?
A) A partnership is not a taxable entity for Federal income tax purposes.
B) Partnership income is comprised of ordinary partnership income or loss and separately stated items.
C) A partnership is required to file a return with the IRS.
D) A partner's profit-sharing ratio equals the partner's loss-sharing ratio.
E) All of these statements are correct.

Question

Quizplus · Accepted Answer

A partner's profit-sharing ratio and loss-sharing ratio may differ depending on the partnership agreement. It is not a requirement for them to be equal.

Which One of the Following Statements Regarding Partnership Taxation Is