My guess is that you can take out any amount for damages, but cannot deduct for the 3 weeks loss of rent.In any event, you MUST send a Summary of the Security Deposit showing the disposition of the deposit. 

@Jessica Zolotorofe  correct me if I am wrong.. but the funds in the LLC are the LLC funds not the individual owners of the LLC funds.. and then you have an operating agreement or some sort of agreement as to disposition of funds be them profits or capital. now in practice I get it... if I put 100k in to a LLC and their is 200k in there and I am in a dispute with the other party for whatever reason if I pull MY 100k that still is a violation.. but since its mine possession is 9/10s of the law and well I will take what is mine attitude seems to prevail in these cirucumstances.

How I integrate it with real estate is when I sell/flip a property or have cash flow I will take the cash flow to fund my policies.When it comes to cashflow the revenue source is generally is tax free (deferred till disposition or sale of property) when planned correctly or very close to it and this cashflow is used to fund the Life insurance vehicle where it grows tax free.

So if your AGI is roughly $65K you need to deduct itemized/standard deduction as well as exemptions from that amount and then add back the net gain from the disposition of the rental property to get a rough estimate of your taxable income (which will determine the capital gains rate used).

You need to do a formal checkout, change the locks, and mail the tenants a final accounting for the disposition of their security deposit (I suspect most if forfeited as unpaid rent).  

IRS issues a  withholding certificate to reduce or eliminate withholding on dispositions of U.S. real property interests by foreign persons.

I have experience in the acquisition/disposition/re-positioning of multifamily properties.

It can be an attorney, a CPA, any other agreed upon third party or it could have already specified in the operating agreement what happens when you both don't agree on the disposition of the asset or the company itself.The best idea if nothing like that already exists is to use the cookie example above.

The point is to abate that fear upfront and have a viable disposition plan for shares down the road.

Also, because I am gonna be closing on 10 or so houses I plan to have the properties professionally managed which is the only way this kind of disposition makes sense IMO.