Cash out refinance distribution to investors (tax implications)

[Scott Johnston]

We are looking at building a model where we refinance to pull cash out and return capital to LPs. Typically cash out from a refinance is not taxable but does it become taxable if excess is given to LPs beyond their initial investment? 

Simple Example - LPs invest 100K. Refinance pulls out 150K and given all to LPs. Will the additional 50K be taxable? Do the tax implications change if LPs still maintain some ownership after receiving the 150K vs being bought out with no remaining ownership? I imagine GPs will be effected at the time of sale at a later date when determining basis etc.

Thanks