C is corrent. The requirement is to determine the correct statement(s) concerning agreements for guaranteed payments. Guaranteed payments are payments made to a partner for services or for the use of capital if the payments are determined without regard to the amount of partnership income. Guaranteed payments are deductible by a partnership in computing its ordinary income or loss from trade or business activities and must be reported as self-employment income by the partner receiving payment. A payment that represents a 10% interest in partnership profits could not be classified as a guaranteed payment because the payment is conditioned on the partnership having profits.
A is incorrect. A guaranteed payment does not depend on partnership profits.
A is incorrect. A guaranteed payment does not depend on partnership profits.
D is incorrect. A salary that is paid without regard to partnership profits is a guaranteed payment.
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