Corpus Properties, LLC has recently acquired as its only asset a commercial office building in Lincoln, Nebraska. The building is 60% leased, although the primary tenant (comprising 25% of the building's rental income stream) has just filed for bankruptcy and will likely terminate its lease through the bankruptcy proceedings.

In exchange for agreeing to manage the property going forward, Jacoby is awarded a 1.5% profits interest on January 1, 2016. Jacoby has not been affiliated with the LLC prior to that date.

Part 1: TRUE or FALSE : The conveyance of the profits interest will likely be an immediately taxable event to Jacoby.

Part 2: Your answer in Part 1 is derived from what authority? ______________________