A Tax Basis Partnership is a type of business entity consisting of two or more partners who share the profits and losses of a business. Tax basis partnerships are similar to sole proprietorships in that the partners are personally liable for the partnership’s debts and obligations, but they also offer certain tax advantages. The most notable advantage is that each partner can be taxed individually on their income from the partnership, allowing them to benefit from lower tax rates. This means that overall, the rate of taxation will be lower than if all partners were taxed as one entity. Additionally, partners may also be eligible for deductions on some expenses not available to sole proprietorships.