Hollister and Gladys do business as partners in Frothy Confections.For federal income tax purposes,Frothy Confections would be treated as
A)a pass-through entity.
B)a natural person.
C)a tax-paying entity.
D)a partnership by estoppel.

Question

Quizplus · Accepted Answer

Partnerships are generally considered pass-through entities for federal income tax purposes, meaning that the partnership itself does not pay income tax. Instead, the partnership's income, deductions, credits, and other items are passed through to the individual partners, who report their share of these items on their personal income tax returns.

Hollister and Gladys Do Business as Partners in Frothy Confections