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Stallings Paper, LLC has three members each owning a 1/3 membership interest in the profits and capital of the business. Two of the members are

Stallings Paper, LLC has three members each owning a 1/3 membership interest in the profits and capital of the business. Two of the members are given guaranteed payments of $5,000 per month for their services to the LLC. Briefly explain whether those payments should be treated as distributions or deductions (or both) by the LLC and why that might matter for tax purposes.

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