@Mike9241Thank you so much for your reply and I think I might still need your help to understand my case.
Here are my clarifications:
1. On my yearly Schedule K-1 (Form 1065), I have income $1,000 and I also receive the return-of-capital check ($350) every year.
2. I pay the Federal and State taxes on the income $1,000 through the tax return every year.
3. I was told that after I redeem my share (I purchased the share in 2015), I will receive the money = $8,000 (my original cost to purchase the share) + (total income listed in K1 from 2015 to the year you redeem your share) - (total return of capital check received in 2016 to the year you redeem your share)
If so, will I have to pay the taxes again on (total income listed in K1 from 2015 to the year you redeem your share) ?
Thanks.
