capital gain from LLC

Angela mack's Profile

I'm owner of 10% from LLC company. We sell a property but we do not want make a distribution the capital gain to the manager.members. This is possible?


Member's Profile

Hi, Angela,

Strictly speaking, an LLC is only required to make distributions to the extent as provided in the operating agreement. If you haven't already, consult your OA to see what, if any, requirements have been agreed to by the members with respect to making cash distributions.

As a practical matter, many LLCs / partnerships which hold property with the intention of selling same, have in their OAs a provision that the net proceeds will be distributed, at least to the extent that the members' / partners' estimated tax liabilities (attributable to the sale gain) will be covered somewhat.

I may not have interpreted your question correctly; post back with more details if need be.

Proformative Advisor
Member's Profile

Please be advised that for an LLC, you will pay taxes on distributed profit and non-distributed profits. An LLC is a pass through entity. You will receive your K-1 and be required to pay taxes on your share of the profits. In a corporation, you do not pay tax on undistributed profits.

Member's Profile

Please seek tax advice from your local tax advisor. It is not advised to take tax advice from online forums.

With the circular 230 rules, any tax professional giving tax advice online would potentially be in violation of many of the non disclosure rules.

It is not advised to state tax questions because it reveals your private tax situation.

Member's Profile

Thanks for all answers.