guaranteed payments and partner's adjusted basis

[cl2019]

I read some thread that says guranteed payments do not impact partner's basis. 
But below is what IRS explains guaranteed payments:
"Guaranteed payments are those made by a partnership to a partner that are determined without regard to the partnership's income. A partnership treats guaranteed payments for services, or for the use of capital, as if they were made to a person who is not a partner. This treatment is for purposes of determining gross income and deductible business expenses only. For other tax purposes, guaranteed payments are treated as a partner's distributive share of ordinary income. Guaranteed payments are not subject to income tax withholding."

Based on this, 
shouldn't  we treat guaranteed payments as an increase in partner's basis if partner's basis calculation is "for other tax purposes", when "guaranteed payments are treated as a partner's distributive share of ordinary income".
Any thoughts?
Thank you!

[Terry D EA]

<<<<<for the use of capital>>>>> not the same thing as basis, outside basis or tax basis.

<<<<<shouldn't  we treat guaranteed payments as an increase in partner's basis if partner's basis calculation is "for other tax purposes", when "guaranteed payments are treated as a partner's distributive share of ordinary income".>>>>>>> NO, NO, NO

A partner's capital account and outside basis are not the same. The partner's capital account measures the partner's equity investment in the partnership. The outside basis measures the adjusted basis of the partner's partnership interest.

A partner who receives a guaranteed payment reports the amount as ordinary income on his or her tax return. ... Since guaranteed payments are not treated as distributions, there is no effect on the recipient partner's capital account or tax basis in the partnership interest.

Just look at it this way, guaranteed payments are for services rendered so it is ordinary income. A distribution is a distribution of the partner's capital (investments from the partner for a percentage of the partnership interest). Distributions affect both outside basis and capital.

See if the link below helps. 

https://www.taxact.com/support/22856/2019/partner-capital-account-vs-basis

 

[DANRVAN]

8 hours ago, cl2019 said:

 when "guaranteed payments are treated as a partner's distributive share of ordinary income".

That is on the partner's side of the transaction, It does not mean that the partnership treats it as a distribution to the partner.  See code sec 705(a).

[Abby Normal]

Except... guaranteed payments reduce ordinary income because they are deducted by the partnership as an expense, so the capital account will decrease for all partners' shares of the guaranteed payment deduction.

[DANRVAN]

47 minutes ago, Abby Normal said:

Except... guaranteed payments reduce ordinary income because they are deducted by the partnership as an expense, so the capital account will decrease for all partners' shares of the guaranteed payment deduction.

To clarify, guaranteed payment does not directly reduce the capital account of the partner receiving a payment, as would a distribution.

[cl2019]

Thank you all! very helpful.