I am closing an LLC and preparing final 1065 and K-1s. One partner has tax basis ending capital amount of $1200. The other members have $0. If there is exactly $1200 cash available, does the LLC pay that member $1200, record it as a withdrawal in his K-1 part L (bringing his final capital to $0), and box 19 as a distribution?
If the answer is yes, does the LLC need to issue a 1099 div to him? Or is the k-1 sufficient record of this?
Would the partner then file form 8949 showing the cost and the proceeds to be $1200, with $0 gain? He's not really "selling" his shares, but just getting his balance back.
Thanks for your input!
