Choice "C" is correct. A partnership calculates net business income or loss and passes each partner's distributive share through on the Schedule K-1. Guaranteed payments paid to partners for services rendered or for the use of capital, without regard to partnership income or profit and loss sharing ratios, are an allowable tax deduction to the partnership and are separately reported on Schedule K-1 for inclusion on the partner's tax return.Choice "a" is incorrect. Salaries paid to non-partner employees are deducted from revenues to arrive at net business income or loss at the partnership level. Each partner's distributive share of the net income or loss is then reported on the Schedule K-1.Choice "d" is incorrect. Advertising expenditures incurred by the partnership are deducted from revenues to arrive at net business income or loss at the partnership level. Each partner's distributive share of the net income or loss is then reported on the Schedule K-1.Choice "b" is incorrect. Depreciation of assets used in the business is deducted from revenues to arrive at net business income or loss at the partnership level. Each partner's distributive share of the net income or loss is then reported on the Schedule K-1.