- This depends on a number of factors:
- If the LLC is elected to be taxed as a corporation, then generally it would be taxable income if a C corporation. If an S-Corp, it may or may not be taxable depending on other circumstances.
- If the LLC is taxed as a partnership (the default tax classification), then generally, no, the distribution to the retiring member would not be taxable income, though there are some technical exceptions.
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