Are Distributions to LLC Members Taxable?

An LLC distribution is a payment of profits made to an LLC’s members.
The LLC’s operating agreement dictates distribution timing and methods.
Available profits must be distributed based on ownership interests.
Members receive ownership interests instead of stock shares.
These interests entitle members to profits, often proportional to ownership percentage.
With 100% ownership, Ashwini distributes all $1,000 profits to herself.
With 50% ownership each, Dev and Albert distribute $500 each.
LLC members pay taxes on distributed and undistributed profits.
Each member pays taxes on income share even without distributions.
Previously taxed distributed profits are not taxed again.
Ownership interests come from member capital contributions.
Membership units represent ownership, proportional to contributions.
Units provide voting rights and proportional profits/losses.
Preferred units have priority profit claims over common units.

An LLC distribution is a payment of profits to members.
Members receive ownership interests, not stock shares.
These interests entitle members to profits, often based on percentage owned.
With 100% ownership, Ashwini distributes all $1,000 profits to herself.
With 50% each, Dev and Albert distribute $500.
The operating agreement dictates distribution timing and methods.
Available profits must distribute based on ownership interests.
Members pay taxes on distributed and undistributed profits.
Each member pays taxes on income share without distributions.
Previously taxed distributions not taxed again.
Ownership interests come from member contributions.
Membership units represent ownership, proportional to contributions.
Units provide voting rights and proportional profits/losses.
Preferred units have priority profit claims over common units.
An agreement outlines distributions, based on contributions.
Distributions can differ from ownership percentages in capital accounts.
Accounts track profits, contributions, distributions per member.
Initial ownership percentages and profit/loss percentages can be in the agreement.