Well that changes my response. Since you actually acquired "property" at the LLC level you now have a loss at the LLC level (not the member level). This loss will be short term or long term depending on how long the option was held.
This loss will be reported on the Form 1065, Schedule K and respective K-1's. This loss will then be passed through to each member on their K-1.
This will then zero out the capital accounts through recognizing the loss at the entity level.
*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.
