S Corp Distributions and Stock Basis

I have a question related to that asked by taxnewbie on this topic. [Submitted by taxnewbie on Mon, 2007-04-09 22:53]

I'm closing a 2-member LLC, taxed as an S Corp, with a bank balance in excess of our basis in the LLC. However, the balance consists of funds we've kept in that account for future business purposes rather than taking them out and depositing them in our own personal accounts. However, we did pay income taxes on these funds during the years they were earned, so it would seem that distributing these funds now should not be a taxable event.

I've not been able to find any information that would so justify not being 'double taxed' on the amount in excess of our accumulated basis. In our context, must we report this distribution on line 16D of the K-1 as distribution of property, or can we just do the distributing without reporting it, since we've already paid taxes on the entire amount?