linette
Level 5
Yes I agree that you need to make sure you are understanding what the attorney has done.   You don't say the tax filing of the LLC prior to this change.  If it is a single owner LLC what is sounds like is that the single owner LLC is converting to a partnership.  Money going directly to the original owner is not making sense and may or may not be a sale to the original owner.  But, once the partnership is formed then the original owner will loan the partnership money.  They agree no draws on profits will be taken until the loan is paid off.  

Since the attorney is involved, you should have a partnership agreement that spells all of this out.  Ask the client for a copy of the partnership agreement.  Then tread lightly on what returns and what work you are willing to do until you understand the ramifications of that work.
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