Den and Carr are partners in the Den-Carr Pa nership. Under the terms of the partnership agreement, Den is to receive 25% of all partnership income or loss plus a guaranteed payment of $80,000 per year. In the current tax year, Den-Carr had $72,000 of ordinary income before any deduction for Den's payment. What income (loss) will Den report on his current-year tax return assuming he materially pa icipates in partnership activities?

A. $18,000 ordinary income; $80,000 guaranteed payment.

8. $18,000 ordinary income; $62,000 guaranteed payment.

C. $80,000 guaranteed payment.

D. $80,000 guaranteed payment; $2,000 ordinary loss.

Bunny and Rabbit are partners in the Hare Partnership. Mr. Bunny and Mr. Rabbit share profits and losses in the ratio of 75% to 25%, respectively. However, the partnership agreement provides for Mr. Bunny to receive a guaranteed payment (salary) in the fixed amount of $140,000, regardless of partnership income. In the current year, the partnership had $100,000 of ordinary income before deducting the guaranteed payment made to Mr. Bunny. Mr. Bunny materially participates and has sufficient basis for any loss. What is the amount that Mr. Bunny should repo as his distributive share of partnership ordinary income (loss) on his current-year tax return?

A. $(30,000) loss.

B. $(10,000) loss.

C. $75,000 income.

D. $110,000 income.