Chapter 14

According to the Internal Revenue Code, partnership income

Flows through to the individual tax returns of the individual partners

A tax advantage of partnerships over the corporate business organizational form is

-A partner's share of partnership operating losses can be used to offset income on the partner's individual tax return -The avoidance of double taxation

The Uniform Partnership Act

-Establishes uniform standards for many partnership characteristics -Provides a legal definition of a partnership -Has been adopted by all states in some form

Which of the following is not a reason for forming a partnership as opposed to a corporation for a new business?

Partnership income typically flows tax-free to the partners

The legal term stating that each partner possesses the right to incur liabilities on behalf of the partnership in the normal course of business is ____ _____

mutual agency