Question

D and H recently graduated from college and have accepted new positions locally. However, they both worked their way through school as painters, and, in order to supplement their incomes, have decided to continue doing so in the evenings. The paint is supplied by the customers, and D and H buy any other equipment and supplies necessary for the jobs. After deducting the cost of such equipment and supplies, any money remaining is split between D and H, who each pay income tax on their earnings. Is there a partnership between D and H?

Answer 1

There is a business partnership between D and H where they share the remaining amount of the work and pay their individual taxes according to their earnings . According to partnership it is not taxable but the individual partners are taxed as per the share they get. Hence they share business partnership.