Question

1.(T or F)In a partnership, income of the business is personal income and business losses can be deducted from taxes.

2.________ is/are responsible for running the day-to-day business of a corporation.

a.Investors
b.Shareholders
c.Officers
d.Incorporators
e.The board of directors

3.(T or F)A franchisor is the owner of a trade name or trademark who is a party to an arrangement whereby another party sells goods or services under the trade name or trademark.

Answer 1

1. The correct answer is false.

In partnership, the taxation is done at the individual owners' level and reduce the effect of double taxation. The profit and losses of the partnership is passed through its members who are the owners and this information is reported in their personal tax return. So, the partnership do not pay federal income tax on its income and the activities of the entity affect the partners' individual tax liabilities.