An LLC member is bought out of a 3 member LLC  for $18K. His capital balance was $6K at the time.  So there is a $12K negative capital balance left on the balance sheet for this member.

There are no hot assets or debt - only cash and fixed assets.

The buyout agreement states that the company will buy out the member. Another member also contributed $18K capital and is now a 2/3 member while the other remaining member remains a 1/3 member. This probably is irrelevant.

How do I report this in PS? The departing member's capital balance is showing negative $12K. Do I simply enter a positive amount for $12K in the "Other Adjustments" line on that member's K-1 Wks?

Where is the $12K negative balance reported in the balance sheet and the tax return?

Thanks.