On December 31 of Last Year, Jacob Gave His Son

Multiple Choice

On December 31 of last year, Jacob gave his son, Joshua, a gift of a 30% interest in a partnership in which capital is a material income-producing factor.For the current calendar year, the partnership's ordinary income was $140,000.Jacob and Joshua were the only partners in the current year.There were no guaranteed payments to partners.Jacob 's services performed for the partnership were worth a reasonable compensation of $40,000 for the current year.Joshua has never performed any services for the partnership.What is Jacob 's distributive share of partnership income for the current year?

A) $110,000.
B) $98,000.
C) $42,000.
D) $30,000.
E) None of the above.