Taxes on dividing up rental portfolio between me and investment partner

[Landon Mizuguchi]

I have 6 rentals that I and my investment partner bought through LLC (50/50), in 2019, for around $1m, before COVID. We're now planning to split the properties (3 each) and go our own separate ways. Over the last 4 years, the value of the portfolio has appreciated to $3m (thanks to the pandemic!).

If we each get our own Single Member LLCs and transfer the properties out. Will we need to pay taxes on the $2m appreciated value ($3m - $1 purchase price)