Partnership Taxation
/ˈpɑrt.nɚ.ʃɪp tækˈseɪ.ʃən/
Definitions
- (n.) The legal framework and tax principles governing how partnerships report income, deductions, gains, and losses to the tax authorities.
Partnership taxation requires the entity to file an informational return without paying income tax at the entity level.
- (n.) The pass-through tax treatment where a partnership's income is taxed at the individual partners' level, not at the partnership level.
Under partnership taxation, partners pay tax on their distributive share of profits regardless of distribution.
Forms
- partnership taxation
Related terms
See also
Commentary
Partnership taxation is distinguished by its flow-through treatment, avoiding double taxation typical of corporations; drafters should clearly specify entity classification to ensure proper tax treatment.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.