Khushboo’s basis in her 25-percent interest in the Rishi Partnership is $40,000 at the start of the current year. During the current year, Rishi reports ordinary business income of $80,000. Rishi also makes a $10,000 guaranteed payment and $16,000 cash distribution, both to Khushboo. What will Khushboo’s basis be at the end of the current year and how much income will Khushboo recognize from these transactions?

a. Basis of $44,000 and income of $30,000

b. Basis of $34,000 and income of $80,000

c. Basis of $34,000 and income of $20,000

d. Basis of $60,000 and income of $20,000

e. Basis of $50,000 and income of $16,000