Investors & landlords

does he owe the LLC the loan or is it the other way around?  if he owes the LLC money that won't be repaid then you may be able to treat this as a distribution to the member. These are certain reporting requirements for property distributions. in addition, if he is the only other member, terminating his interest terminates the partnership since there can't be a one -member/partner partnership, Consult a tax pro for how to proceed.