Question

Paul and Vince do business as partners in Rio Vista Builders, a residential construction firm. For federal income tax purposes, Rio Vista would be treated as: Group of answer choices a) a tax-paying entity. b) a pass-through entity. c) a partnership by estoppel. d) a natural person.

Answer 1

b) a pass-through entity

Step-by-step explanation:

A pass - through entity -

It is the method , used for some specific business plan in order to decrease the effect of the double taxation , is known as the pass - through entity .

In the method of pass - through entity , the income tax is not paid at the very corporate level .

And , hence , in this method , the income is assigned to the respective owners and therefore , the income tax are imposed to the respective owners individually .