Properly reported guaranteed payments have the following effect(s):

I. The guaranteed payment increases receiving partner's ordinary income by the entire amount paid during the tax year

II. The guaranteed payment decreases every partner's tax basis in the partnership by the entire amount paid during the tax year

III. The guaranteed payment is deductible by the partnership in computing its ordinary income or loss for the tax year

a) All of the above

b) I and III, but not II

c) I and II, but not III

d) None of the above