Two amicable partners have decided to end their partnership and distribute the assets.
Partner A will get $300,000 cash and a building with a FMV of $500,000 (cost $300,00 and accum Dep of $100,000).
Partner B will get cash of $50,000 and a building with a FMV of $750,000 (cost $650,000 and accum Depr of $50,000).
After reading the regulations, it appears that section 1250 recapture is classified as a "hot asset". I am concerned that this may be a disproportionate distribution.
Any thoughts?