If partnerships retain their after-tax earnings, when will partners be taxed on the earnings?

Multiple Choice

• Partners will be taxed when they elect to be taxed on undistributed retained earnings.
• Partners will be taxed when they sell their shares at a gain.
• Partners will be taxed as partnership earnings are allocated to them at the end of the year whether they actually receive a distribution or not.
• Partners will be taxed when the earnings are distributed to the partners.