Which of the following statements is correct regarding the provision for income taxes in the financial statements of a sole proprietorship?
- The provision for income taxes should be based on business income using individual tax rates.
- The provision for income taxes should be based on business income using corporate tax rates.
- The provision for income taxes should be based on the proprietor’s total taxable income, allocated to the proprietorship at the percentage that business income bears to the proprietor’s total income.
- No provision for income taxes is required.