The term "investor" makes me think your client borrowed funds to buy then improve this property.  Therefore, the distribution to the "investor" wouldn't be entered anywhere.  Same as a payoff to a bank wouldn't be entered.       However, you say they went 50/50 on improvements. So is there an investor or a co-owner.   Who paid for the property?  How are you reporting the purchase of the property?  How are  you reporting the cost of improvements?