Under Subchapter K, the partnership files Form 1065 reporting its income to the IRS. Which
statement is true?
a. The partners pay income tax on the portion of that taxable income that is distributed to them.
b. The partnership pays tax only on that portion of income that is not distributed to the partners.
c. The partners pay tax on their distributive shares of partnership income regardless of distributions.
d. The partners pay tax only on the excess of distributions over their basis.