Paul and Vince do business as partners in Rio Vista Builders, a residential construction firm. For federal income tax purposes, Rio Vista would be treated as: Group of answer choices a) a tax-paying entity. b) a pass-through entity. c) a partnership by estoppel. d) a natural person.

b) a pass-through entity

Explanation:

A pass - through entity -

It is the method, used for some specific business plan in order to decrease the effect of the double taxation, is known as the pass - through entity.

In the method of pass - through entity, the income tax is not paid at the very corporate level.

And, hence, in this method, the income is assigned to the respective owners and therefore, the income tax are imposed to the respective owners individually.