Eli5 what is the tax advantage in a General Partnership business organization?
In: Other
The answer is going to be very state specific, but at a US Federal level businesses as partnerships do not have to pay income tax; each partner files the profits or losses of the business on his or her own personal income tax return. This way the business does not get taxed separately and owners are not subject to double-taxation on profits (unlike a C corporation).
That said, you don’t tend to see them all that often anymore, because LLPs and LLCs confer this same tax advantage while still providing some liability protection (which partnerships lack).
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