Partner Z (a calendar-year, cash basis taxpayer) performs services for the XYZ partnership (a FYE 10/31, accrual basis taxpayer) in October, 2018. In return, Z is to get a guaranteed payment of $20,000. XYZ pays Z the guaranteed payment in January, 2019.

a. What tax year is the payment deducted by XYZ?

b. What tax year is the payment included in Zs income?

c. Assume that XYZ is an equal partnership and earns $140,000 of income before considering the guaranteed payment. How much income will Z have from the partnership in 2018?