In a sole proprietorship, business taxes are assessed against which of the following?

In a sole proprietorship, business taxes are assessed against the personal income of the owner, which is why the correct answer is personal. This structure means that the business itself is not taxed separately; instead, all income generated by the sole proprietorship is reported on the owner’s individual tax return. The owner is personally responsible for paying taxes on all profits made by the business. This simplifies the tax process, as there is no need for separate business tax filings, and any business losses can also directly offset the owner’s personal income, offering potential tax benefits.

The other options do not apply because, in a sole proprietorship, there are no shareholders or a distinct business entity that is taxed separately. Additionally, parents are not involved in business taxation unless they have ownership or financial stakes in the business, which is not a characteristic of a sole proprietorship structure.