### Question
How is the term net precontribution gain defined?


### Answer
The term **net precontribution gain** is defined in *26 U.S.C. § 737* as the following:

> the net gain (if any) which would have been recognized by the distributee partner under section 704(c)(1)(B) if all property which—


(1) had been contributed to the partnership by the distributee partner within 7 years of the distribution, and


(2) is held by such partnership immediately before the distribution,


  

had been distributed by such partnership to another partner

#### Citation:
  - *26 U.S.C. § 737*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter K-Partners and Partnerships > PART II-CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS > Subpart B-Distributions by a Partnership**

