Phil and Bill Each Own a 50 Percent Interest in P&B

Phil and Bill each own a 50 percent interest in P&B Interests. P&B Interests has ordinary income for the year of $35,000 before guaranteed payments to Phil. If Phil receives guaranteed payments of $25,000 during the tax year, what is the total income or loss that should be reported by Bill from the partnership for this tax year?

A) $5,000 income
B) $17,500 income
C) $25,000 income
D) $30,000 income
E) None of the above