To the accountants or others with experience...

When you have a preferred / common structure in a self-funded deal, how do income taxes work prior to the pref being distributed back to investors - assume LLC.

Do pref investors pay 100% of income taxes on K1 assuming that there is still pref outstanding?

If you have a year where you paid back all pref and then start to distribute to common, are income taxes then paid based on ratio of pref to common?

Happy to chat for 10 minutes as well if unclear.
Thank you and Happy New Year!