Our multi-member LLC located in Minnesota has (3) partners, (2) are non-resident, (1) is a resident. The state income taxes are paid by the partnership for the (2) non-residents, a check is written to the state to satisfy their MN income tax. My inclination is this payment on their behalf is a distribution and would reduce their capital position accordingly. So my question:
Is this payment of state income taxes to MN on behalf of the (2) non-resident partners also considered a partner distribution (reflected on their K-1)?
