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capital gain from LLC

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?

Answers

David Collins
Title: CEO
Company: Glentyde Capital Advisors
(CEO, Glentyde Capital Advisors) |

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.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

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.

Anonymous
(Agent, JKS Solutions, Inc.) |

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.

Angela mack
Title: Management Consulting
Company: Creatrix Offices
(Management Consulting, Creatrix Offices) |

Thanks for all answers.

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