If you don't have any capital invested or basis accumulated, then you don't have any economic effect, let alone substantial.
Guaranteed payments do not impact your basis, so if your LLC was just generating losses, you have nothing invested.
This is a complicated area.
What you are receiving is a profits interest and the LLC had not generated any profit based on your facts.
Unfortunately many CPA's lack a strong understanding of this complicated area.
Your new CPA appears to understand the concept better than the original.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
