I have a LLC with multiple partners.  One partner's interest was redeemed.  Partner was given back his original investment of $200k.  But the partner has accumulated operating losses for the past few years resulting in a negative basis of $210k.  I know the redeemed partner needs to pick up the gain of $210k on his individual tax return.  But I am not sure how to report it on 1065.  If I book a gain of $210k with offsetting increase to equity, the book is balanced, but the basis on the partner's K-1 doesn't get zero out.  I feel that I am missing something.