Norman has a one-third interest in the Hibachi Partnership. During 2023, Norman received a $16,000 guaranteed payment, which was deductible by the partnership, for services rendered to Hibachi. Hibachi reported a 2023 operating loss of $70,000 before the guaranteed payment. What is(are) the net effect(s) of the guaranteed payment?I. The guaranteed payment decreases Normans tax basis in Hibachi by $16,000.II.The guaranteed payment increases Normans ordinary income by $16,000. Select one:

a. I only

b. II only

c. Both I and II

d. Neither I nor II