Q1.- Which of the following statements is true about guaranteed payments? Guaranteed payments are:

A.- Made by a partnership to a partner and are determined by the partnership's income.

B.- Subject to income tax withholding.

C.- Reported on the receiving partner's Schedule E (Form 1040) as net short-term capital gain.

D.- Reported on the receiving partner's Schedule E (Form 1040) as ordinary income.

Q2.- Rental real estate activities, in which a taxpayer materially participates, are treated as nonpassive activities for any tax year unless:

A.- The taxpayer qualifies as a real estate professional.

B.- The taxpayer qualified as a real estate professional in any three of the preceding five years.

C.- Less than half of the taxpayer's personal services performed during the year were performed in real property trades or businesses in which they materially participated.

D.- The taxpayer performed more than 1,000 hours of services in real property trades or businesses in which they materially participated.