Syntax Error within Linq statement

What is returned from your LINQ query will be of type List<TKey> - ie, you're using a Func<User,TKey> to Select from your original list.

However, on the body of the extension method you've said it will return a List<User>.

So, then the function you pass in is pulling just the LastName from your users and returning a distinct list of them. Your return is List<string> not List<User> as you probably expect.

IMO, @tym32167's answer breaks desired behavior, since you need List<User> as output.

You need to build up custom EqualityComparer<User> to call Distinct on User objects. Something like this:

static class MyExtensions
{
    private class UserByKeyComparer<TKey> : EqualityComparer<User>
    {
        private readonly Func<User, TKey> keySelector;
        private readonly EqualityComparer<TKey> keyComparer;

        public UserByKeyComparer(Func<User, TKey> keyFunc)
        {
            this.keySelector = keyFunc;
            this.keyComparer = EqualityComparer<TKey>.Default;
        }

        public override bool Equals(User x, User y)
        {
            return keyComparer.Equals(keySelector(x), keySelector(y));
        }

        public override int GetHashCode(User obj)
        {
            return keyComparer.GetHashCode(keySelector(obj));
        }
    }

    public static List<User> FilterDistinct<TKey>(this IEnumerable<User> source, Func<User, TKey> keySelector)
    {
        return source
            .Where(x => keySelector(x) != null && keySelector(x).ToString() != string.Empty)
            .Distinct(new UserByKeyComparer<TKey>(keySelector))
            .ToList();
    }
}

Another option is to use GroupBy (but I think, that it will be slower):

public static List<User> FilterDistinct<TKey>(this IEnumerable<User> source, Func<User, TKey> keySelector)
{
    return source
        .Where(x => keySelector(x) != null && keySelector(x).ToString() != string.Empty)
        .GroupBy(keySelector)
        .Select(g => g.First())
        .ToList();
}