Replies to your follow-up:
- Not sure what you mean by "I'm assuming the tax basis for each partner remains at its positive balance".
- Any tax implications will be determined at the member level.
- Each member should be maintaining a tax basis schedule. This schedule will be updated for the applicable items on the final K-1 EXCEPT for any liquidating distributions.
- At the 1040 level, the liquidating distribution of each member will be the "selling" price when entering on form 8949, and the tax basis will be the cost basis. TT will then determine the gain or loss.
- Technically the balance sheet should be zeroed out and it appears that yours in fact does.
*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.
