Question

Partnerships and proprietorships generally have a tax advantage over corporations.

a. true
b. false

Answer 1

Partnerships and proprietorships generally have a tax advantage over corporations. True (a).

Step-by-step explanation:

The statement 'partnerships and proprietorships generally have a tax advantage over corporations' is True(a). Both partnerships and proprietorships are considered pass-through entities, meaning that the profits and losses of the business pass through to the owners and are taxed at their individual income tax rates. On the other hand, corporations are subject to double taxation, meaning that the corporation itself pays taxes on its profits and then the owners also pay taxes on their share of the profits when they receive dividends or sell their shares.