Marty, Nathan, and Oliver form MNO Mechanics, LLC. They make no elections so the LLC will default to a partnership. They agree that Oliver will operate the business and receive a guaranteed payment of $50,000. Oliver's share of the income this year is $20,000. How much of the $70,000 will be subject to SE tax for Oliver?

$0. Limited partners are not subject to SE tax.

$20,000. Only the income portion of the $70,000 is subject to SE tax.

$50,000. Only the guaranteed payment is subject to SE tax. As a limited partner, the income would not be subject to SE tax.

$70,000. Both the guaranteed payment and Oliver's share of income are subject to SE tax.