Final answer:
Lance and Darrell will each pay taxes on $50,000, their respective share of the partnership's profits. Partnerships are pass-through entities where the partners are taxed on the profits instead of the partnership itself being subject to corporate income tax.
Step-by-step explanation:
Lance and Darrell have an equal partnership, and after expenses, the partnership had a profit of $100,000 for the year. Given that they have an equal partnership and taking into account how partnerships are generally taxed, it's clear that each partner would pay taxes on their individual share of the profits.
In this scenario, there are no indications that any special allocations or agreements that would change this typical arrangement. Therefore, Lance and Darrell will each pay taxes on $50,000, which is their share of the partnership's profit.
In a typical partnership, the business itself does not pay taxes on profits; instead, profits are passed through to the partners who then report it on their personal tax returns. This is an example of a pass-through entity where the individual partners are taxed on the income, and the partnership's profits are not subject to corporate income tax.
In conclusion, based on the information provided and the general rules applicable to partnerships, the correct answer would be that each partner pays taxes on their respective share of the income, which in this case is $50,000.