HAVEYOUREDUCEDTHEINVESTMENTACCOUNTONYOURBALANCESHEETTOREFLECTTHEDISTRIBUTION?

A cash div liquidation is entered like a stock sale on Sch D on a 1040. Im not familiar with entering Sch D transactions for a partnership, but Im not sure why it wouldnt be reportable income.

@Just-Lisa-Now-  It's reportable to the extent it exceeds basis in the stock.

report after they receive enough distributions to get past basis

The above is correct, it's a capital gain transaction after the capital acocunt has been reduced to -0-. However, I've seen where the buyout of a owner on an installment basis has been reported as a cash liquidation dividend. Get the facts before ignoring.