K-1: Received distribution for my interest in rental properties which was transferred to remaining partners. Do I report a cap gain from the distribution? If so, how?

There are a couple areas you need to address when reporting the disposition of your interest.  You have to start wit the 751 property sale , which looks to the underlying assets as a sale your proportional share- this is reported as ordinary income . 

After you report thus income, you will enter the remaining disposition of your LLC interest as a Investment sale.  You will need your adjusted basis information to determine your income.