The only way that comes to mind to "partially" liquidate a multi-member LLC/Partnership, is if the business sold some of it's business assets. If this is what occurred, then the sale/disposition of the asset is reported in the business assets section of the 1065 Partnership return. Then any distribution of the proceeds from the sale (if any) are reported in the appropriate box of the K-1 of those who received any of those proceeds. Could be box 11 for Other Income, box 10 if it was a Sec 1231 asset type, box 9c for unrecaptured 1250 gain, etc, etc, etc,.
So without knowing the specifics of what was liquidated and how, it's just not possible to provide you a useful response.
