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Your Client, Greg, Contributed Precontribution Gain Property to BIG LLC

question 200

Essay

Your client, Greg, contributed precontribution gain property to BIG LLC on December 31, 2018, in exchange for a 30% interest.
a. Describe two types of distributions that might result in some or all of this precontribution gain being recognized by Greg.
b. In general terms, what is the purpose of these rules?


Definitions:

Oral Auction

An event where items or services are sold to individuals who make the highest spoken offer.

True Values

Refers to the actual, inherent value or worth of an item, property, or financial instrument, as opposed to its market price or cost.

Just over

Slightly more than a specified amount, number, or degree.

Consumer Surplus

The discrepancy between what consumers are ready and able to spend on a good or service and the amount they end up paying.

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