1.

Samuel is the managing general partner of STU, in which he owns a 25% interest. For the year, STU reported ordinary income of $400,000 (after deducting all guaranteed payments). In addition, the LLC reported interest income of $12,000. Samuel received a guaranteed payment of $120,000 for services he performed for STU. How much income from self-employment did Samuel earn from STU?

a. $100,000

b. $223,000

c. $220,000

d. $120,000

e. None of these choices are correct.

2.

Dan receives a proportionate current (nonliquidating) distribution when the basis of his partnership interest is $30,000. The distribution consists of $10,000 in cash and property with an adjusted basis to the partnership of $24,000 and a fair market value of $26,500. Dan's basis in the noncash property is:

a. $10,000.

b. $20,000.

c. $0.

d. $26,500.

e. $24,000.