Hi, if anyone can point me into the right direction, I would really appreciate it.
An LLC has 2 members (50/50) filing a 1065. Partner A has a loan to the LLC for $700,000. The business is not doing well and partner A has decided to abandon his interest. When he does this, the loan would be cancelled and if I am correct the LLC would recognize $700,000 as income and 50% would flow through to Partner B and 50% to Partner A. Can it be structured so that the full $700,000 of income flows directly to the Partner A? Thanks so much for any advice!