A guaranteed payment for a partner’s services that is payable to the partner without regard to partnership profits will have which of the following effect(s)?
I. The guaranteed payment increases the receiving partner’s ordinary income by the entire amount paid during the partnership’s tax year
II. The guaranteed payment decreases every partner’s tax basis in the partnership by the entire amount paid during the tax year
III. The guaranteed payment is either capitalized or deducted by the partnership in computing its ordinary income or loss for the tax year, depending on the nature of the services provided by the partner
a. All of the above
b. I and III, but not II
c. I and II, but not III
d. None of the above
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