Joe, Frank, and Kate form an equal partnership and Joe proceeds to rent property to it. The partnership is an accrual basis taxpayer, Joe is a cash basis taxpayer, and both the partnership and Joe use a calendar based taxable year. Prior to deducting any expense for rent, the partnership has ordinary income of $12,000 in its first year. How much income is recognized by the partners for the first year should the partnership accrue $3,000 of rental expense payable to Joe at year end?

	A.	Each partner recognizes $3,000 of income from the partnership. Partner A also recognizes $3,000 of rental income.
	B.	Each partner recognizes $4,000 of income from the partnership. Joe recognizes no rental income until it is paid by the partnership.
	C.	Frank and Kate recognize $3,000 of ordinary income. Joe recognizes $6,000 of ordinary income, $3,000 of which is considered a guaranteed payment to Joe.
	D.	Each partner recognizes $3,000 of income from the partnership. Joe also recognizes $3,000 of rental income, but not until it is paid.