QuickBooks Dictionary
Partnership
A business entity owned by two or more people who are legally responsible for the debts and taxes of the business. A partnership does not pay taxes. It is a conduit for nontaxable income, dividend income, partially taxable interest, ordinary income, and the capital gains and losses shares to be taken into the income of the individual partners. For income tax purposes, the term partnership is more comprehensive than when taken in its ordinary meaning. It includes a syndicate, group, pool and joint venture, as well as an ordinary partnership, in which two or more persons join their money and/or their skills in carrying on as co-owners a business for profit. If the organization of a limited partnership is more in the nature of an association than a partnership, it is deemed to be an association taxable as a corporation.