What type of business entity is treated as separate from its owners for both accounting and tax purposes?

A corporation is treated as a separate entity from its owners for both accounting and tax purposes, which is why it is the correct answer. This means that a corporation can own property, enter into contracts, and be held liable for its debts independently of its shareholders. This legal separation provides limited liability protection to its owners, meaning that shareholders are typically not personally responsible for the corporation's debts or liabilities beyond their investment in the company.

From an accounting perspective, this separation is crucial as it allows for clear financial reporting and accountability. The corporation pays taxes on its profits at the corporate tax rate. Additionally, when dividends are distributed to shareholders, those are taxed again at the individual level, leading to a phenomenon known as double taxation. This structure contrasts with other business entities, where owners may face personal liability for business debts and profits are often taxed at the individual level.