As a general rule,a distribution to a partner from a partnership is treated as:

A) A guaranteed payment.
B) A reduction in basis,and no gain or loss is recognized.
C) Ordinary income.
D) A capital gain distribution.

Distribution

The payment of assets from a fund or account to its beneficiaries or shareholders, such as dividends or withdrawals.

Reduction in Basis

A decrease in the tax basis of an asset, which could result from deductions such as depreciation, or after receiving tax-free returns of capital.