ABC Partnership is considering two compensation schemes for it's general partner, Robin, who runs the business on a daily basis. Robin can either be given a $$50,000$ guaranteed payment, or she can be given a $$60,000$ distribution $($return of capital$)$ each year. It is important to note, that ABC Partnership just started business in $2023,$ so they have reported ordinary losses for the last few years and are projected to continue reporting losses for the next several years.

From Robin's standpoint on her individual tax return, are each compensation alternatives reported the same? Are both considered taxable to Robin? What other considerations should Robin take into account $($hint: basis$)$ as a general partner? It may be helpful to explain how each compensation alternative is treated at the partnership level $($hint: deduction, basis reduction, separately stated item...$).$ What would your final recommendation be for Robin?