For the proprietorship, the IRS treats the business a the individual owner. All income appears on the owner's return as personal income. Thus, the proprietorship is not regarded by the IRS as a separate tax entity. As can be seen in Table 9.2 this treatment of taxes affects the taxable year, distribution of profits to owners, organization costs, capital gains, capital losses, and medical benefits. Each of these is treated as if it were incurred by the individual owner and not the business.