I am a member of a LCC which owns a commercial real estate property. The bank has asked us to maintain a reserve balance of $40k at any time for unexpected expenses. My question (#1) is : Is there any provision to show this $40k in tax filings as an expense ? Other important question (#2) I have is this year all the members of LLC have decided not to take profits until that reserve balance of $40k is reached. At the end of 2017, profit/loss statement shows a profit of 20k, so is there a way to get $0 on K1 as the LLC members decided not to take any profit ? Thanks.
