what we don't know which affects your reporting was whether or not the partnership elected 754 to adjust the basis in your portion of the land to its fair market value on the date of death and thus whether that $140K gain takes your stepped-up basis into account.
say it did, then in theory the capital account reconciliation at the beginning of the year should reflect your tax basis, including the step-up as that is a requirement (from 1065 instructions - Item L
The partnership must report your beginning capital account and ending capital account for the year using the Tax Basis Method, including the amount of capital you contributed to the partnership during the year, your share of the partnership's current year net income or loss as computed for tax purposes, any withdrawals and distributions made to you by the partnership, and any other increases or decreases to your capital account determined in a manner generally consistent with figuring the partner's adjusted tax basis in its partnership interest (without regard to partnership liabilities), taking into account the rules and principles of sections 705, 722, 733, and 742. See the Instructions for Form 1065 for more details.)
so, beginning capital + income/loss including that capital gain less distributions is your ending tax basis. if that's not zero you report a capital loss on the disposition of your LLC interest. in theory there should be no gain or loss. for example, in 2008 your capital account reflects tax basis of $150K and the land is the only asset. $50K is the step-up. no income/loss or distributions until 2021 when the property was sold. your portion of the sales proceeds is $290 vs basis = gain of $140 (without the step-up your gain would have been $290 less $100). you should have received $290K in distribution. so tax basis at end of year is the $150 +$140-$290=0
let's say now no 754 adjustment - the step up was not reflected.
so, your tax basis, in theory, would be beginning capital + income/loss including that capital gain less distributions + the amount of the step-up. this would be your ending tax basis for which you received zero so it would be recorded as a capital loss. example here the land would be sold for $240 with a tax basis of $100 producing the $140 gain but your real gain is $90 due to the $50K step-up (outside tax basis).
so your outside tax basis might be the $100K + $140K - $240K + $50K = $50K for which you got zero. reflecting this as a $50K capital loss on disposition of partnership produces a net capital gain of $90.
please note this is all hypothetical because we don't know what the what was reflect properly on your k-1s for all the years 2008-2021
