Return OF capital vs Return ON capital? (Syndication LP Investor)

[Chris Collins]

As a passive investor in an apartment syndication, you receive distributions along the way, then a larger chunk if/when the property sells or is refinanced.

These payouts to the investor are typically deemed either "Return OF capital" or "Return ON capital"

QUESTION: What is the difference and how does it affect the investor? 

-How does it affect the initial invested dollar amount?

-How does it affect the money you have left in the deal?

-How does it affect your % ownership in the deal?

-Is there a TAX implication based on this wording?

-As an investor, which do you prefer for you?

-As an operator, which do you prefer for your investors?

Thanks in advance!

-Chris