Final answer:
Profits from a sole proprietorship like Javier's golf shop are taxed only as personal income, not as separate business income. This is because a sole proprietorship is not legally distinct from its owner.
Step-by-step explanation:
In the context of sole proprietorship, any profit earned by Javier's golf shop is only taxed once as Javier's personal income. This is because, legally, there is no distinction between the business owner and the business itself in a sole proprietorship. Therefore, the correct answer to the question is 'B. taxed only as Javier's personal income.'
Sole proprietorships are the simplest form of business organization and are incredibly easy to set up. The owner has complete control over the business and its profits, but this also means assuming all the risks and being responsible for all debts and obligations of the business. Unlike corporations, which face 'double taxation' where the business itself is taxed and then dividends paid to shareholders are also taxed, a sole proprietorship's income is only subjected to individual income tax.