Llc
A LLC consisting of a brother and sister has an investment account.Can ownership change from the LLC 1/2 to each of them personaly. Nothing will be sold. Will the ownership change create a taxable event?
1 Answer from Attorneys
Re: Llc
Without knowing all the history it is difficult to answer this question. The "change" will be deemed to be a distribution. Some distributions are prohibited under Florida statutes, especially when they cause the LLC to become insolvent. Also, the operating agreement for the LLC may have some restrictions. Whether or not it is taxable will depend on the nature of the distribution; for example is it a distribution of capital, profit or a repayment of a loan. Also, what is the capital account or basis of the member receiving the distribution? You need to consult with counsel and your accountant.
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