how are LLC withdrawals beyond capital basis taxed?

[Allan C.]

I have a multi-member LLC that hold several properties and we refinanced our portfolio. Due to appreciation, the refi loan amount exceeds the capital basis of the LLC. If the members withdraw funds beyond the capital account basis, does this trigger a taxable event through individual K1s at a capital gains rate or at ordinary income rate? Our CPA is consulting with others, hence I'm doing the same in parallel.