00:01
Hello students, here is a question which of the following regarding partnership taxation is incorrect.
00:06
So, we have an options given here.
00:08
So, the options will be a partnership is taxpaying entity for federal income purpose, federal income purpose, income tax purposes and the second option will be partnership income is partnership income is comprised of ordinary partnership income, partnership income or loss and separately stated item, separately stated item.
01:12
The next is a partnership is required to partnership is required to file a return with irs.
01:34
Then the fourth is a partner profit sharing ratio, a partner profit sharing percentage may differ, percentage may differ from a partner from the partner loss sharing percentage.
02:08
So, the last option will be all the statements are correct.
02:20
So, these are the five options we have, we have to choose which is the right option from this.
02:25
So, when it comes to the first option, a partnership is a taxpaying entity for federal income tax purpose, this statement is incorrect because a partnership is a pass through entity meaning it does not pay a federal income tax instead income deductions and the credit flow through the partners who report their shares of the individual tax return.
02:46
When it comes to second option, partnership income is comprised of ordinary partnership income or loss and separately stated item, this statement is correct.
02:55
Partnership income includes both ordinary income or loss separately stated items which are reported separately on the partnership tax return...