What forms do I need to fill out in order to distribute property from a LLC?

[jdoeslash]

Hello -

My partner and I would like to distribute a rental property from an LLC to our personal names.  The property is fully paid off, and there are no profits. I believe this would be characterized as a "return of capital" so no taxes would be owed.

From a logistics perspective, what forms need to be filled out in order to record the distribution of property to our personal names?

Thanks!

[ThomasM125]

You need to report the property distribution in box 19 on schedule K-1, with a code C, which is for "other property."

[Carl]

Depends on how the property was put in the LLC to begin with. If the two of you originally owned the property and put it in the LLC as a capital contribution, then removal of the property from the LLC back to the original contributors would be a return of capital. But you still have to show the transfer/removal of the asset from the LLC/Partnership. (I'm not up to stuff on exactly how to do that part.)