Choice of Entity – Partnership 1065

General information: A partnership is a business structure where two or more individuals co-own a business, sharing its profits, losses, and liabilities. For tax purposes, partnerships are considered “pass-through” entities, meaning the partnership itself doesn’t pay income tax. Instead, profits and losses are passed through to the partners, who report them on their individual tax returns. To report the partnership’s financial activities, the entity must file Form 1065, “U.S. Return of Partnership Income.”