The TUV Partnership is considering two compensation schemes for Tracy, the partner who runs the business on a daily basis. Tracy can be given a $10,000 guaranteed payment, or she can be given a comparably larger distributive share and distribution) so that she receives about $10,000 more each year. From the standpoint of when the income must be reported in Tracy's tax return, are these two compensation alternatives the same? Are there any other points of comparison that may be relevant? From the standpoint of when the income must be reported in Tracy's tax return, are these two compensation alternatives the same? O A. No. If Tracy is given a $10,000 guaranteed payment, the payment would be reported as a capital gain. If Tracy is given a comparably larger distributive share and distribution) so that she receives about $10,000 more each year, the payment would be reported as ordinary income. OB. Yes. Regulation Sec. 1.707-1(c) provides that a partner reports guaranteed payments as ordinary income in the partner's tax year that includes the last day of the partnership's tax year in which the partnership deducted the payments under its method of accounting. A partner reports his or her distributive share of partnership items (determined under Sec. 702(a)) in the tax year that includes the last day of the partnership's tax year. Thus, from a timing perspective, the two payments schemes are the same to Tracy. O C. Yes. Regulation Sec. 1.707-1(c) provides that a partner reports guaranteed payments as capital gains in the partner's tax year that includes the last day of the partnership's tax year in which the partnership deducted the payments under its method of accounting. A partner reports his or her distributive share of partnership items (determined under Sec. 702(a)) in the tax year that includes the last day of the partnership's tax year. Thus, from a timing perspective, the two payments schemes are the same to Tracy. OD. No. If Tracy is given a $10,000 guaranteed payment, the payment would be reported as ordinary income. If Tracy is given a comparably larger distributive share and distribution) so that she receives about $10,000 more each year, the payment would be reported as a capital gain. Are there any other points of comparison that may be relevant? O A. Yes. First, a general partner's self-employment income includes both his or her distributive share of partnership ordinary income and any guaranteed payment. Second, however, the partnership ordinary income does not qualify as business income for the QBI deduction while the guaranteed payment does qualify. OB. Yes. A general partner's self-employment income does not include guaranteed payment. As a result, the guaranteed payment does not qualify as business income for the QBI deduction. OC. Yes. First, a general partner's self-employment income includes both his or her distributive share of partnership ordinary income and any guaranteed payment. Second, however, the guaranteed payment does not qualify as business income for the QBI deduction while the partnership ordinary income does qualify OD. No. There are not other points of comparison that may be relevant. The TUV Partnership is considering two compensation schemes for Tracy, the partner who runs the business on a daily basis. Tracy can be given a $10,000 guaranteed payment, or she can be given a comparably larger distributive share and distribution) so that she receives about $10,000 more each year. From the standpoint of when the income must be reported in Tracy's tax return, are these two compensation alternatives the same? Are there any other points of comparison that may be relevant? From the standpoint of when the income must be reported in Tracy's tax return, are these two compensation alternatives the same? O A. No. If Tracy is given a $10,000 guaranteed payment, the payment would be reported as a capital gain. If Tracy is given a comparably larger distributive share and distribution) so that she receives about $10,000 more each year, the payment would be reported as ordinary income. OB. Yes. Regulation Sec. 1.707-1(c) provides that a partner reports guaranteed payments as ordinary income in the partner's tax year that includes the last day of the partnership's tax year in which the partnership deducted the payments under its method of accounting. A partner reports his or her distributive share of partnership items (determined under Sec. 702(a)) in the tax year that includes the last day of the partnership's tax year. Thus, from a timing perspective, the two payments schemes are the same to Tracy. O C. Yes. Regulation Sec. 1.707-1(c) provides that a partner reports guaranteed payments as capital gains in the partner's tax year that includes the last day of the partnership's tax year in which the partnership deducted the payments under its method of accounting. A partner reports his or her distributive share of partnership items (determined under Sec. 702(a)) in the tax year that includes the last day of the partnership's tax year. Thus, from a timing perspective, the two payments schemes are the same to Tracy. OD. No. If Tracy is given a $10,000 guaranteed payment, the payment would be reported as ordinary income. If Tracy is given a comparably larger distributive share and distribution) so that she receives about $10,000 more each year, the payment would be reported as a capital gain. Are there any other points of comparison that may be relevant? O A. Yes. First, a general partner's self-employment income includes both his or her distributive share of partnership ordinary income and any guaranteed payment. Second, however, the partnership ordinary income does not qualify as business income for the QBI deduction while the guaranteed payment does qualify. OB. Yes. A general partner's self-employment income does not include guaranteed payment. As a result, the guaranteed payment does not qualify as business income for the QBI deduction. OC. Yes. First, a general partner's self-employment income includes both his or her distributive share of partnership ordinary income and any guaranteed payment. Second, however, the guaranteed payment does not qualify as business income for the QBI deduction while the partnership ordinary income does qualify OD. No. There are not other points of comparison that may be relevant