In the example you were using, there would be a $100,000 that was attributed to the building itself as 27 and a half years if it’s residential, 39 years if it’s commercial, and in this case commercial means like an office building or a strip mall or something like that.

If you look at the transaction as a whole, you took a massive deduction one year, likely paying no tax and losing tax attributes, then in the final year, you pile all of that deduction back on top as ordinary income in a year you likely have higher income....I am not saying it is a bad idea, someone who doesn't have much income will certainly want to weigh this possibility and consider their timing. 

Accelerated depreciation reduces the adjusted tax basis, and amounts attributable to §1245 property are subject to ordinary income recapture, while §1250 depreciation on the remaining real property may be subject to unrecaptured §1250 gain taxed at a maximum 25% rate.

You miss one key attribute of rent control in your analysis.  

You get 3 very unique attributes when do what we coin "Path Of Progress" Investing: Forced Appreciation, Market Certainty via review of the development plan (cities not just individual builders) and my "Happy Place" 0-capex. 

Does the property distributed retain its tax attributes in the hands of the partners post-distribution? 

Spot on @Don KonipolYour only missing the key attributes to a deal maker; we never look at a property and ask IF it works, we look at every potential and ask HOW does it work. 

This argument reminds me of a saying attributed to Albert Einstein “If you can't explain it to a six year old, you don't understand it yourself.”So here is the E=MC2 of this discussionIf you want to be completely passive as an investor you will likely have greater success with the S&P than with real estate, however if you want your own activity and intelligence to play a role in your outcomes (with adequate time and the accumulation of knowledge) Real estate will likely rise above the passive investment of the S&P 500 and Wall St in General.  

So the buy box has drastically changed and we will not be dealing with asbestos, lead based paint, ungrounded electric, aluminum wiring, oil heat, steam heat, old windows, little or no insulation, and other such old building attributes. 

Blackstone was the largest of these buyers, but slowed their buying in September 2022 as home prices sword they had started buying in 2012 and many attribute them to cleaning up the housing mess of the Great Recession, buying up swaths of homes in disrepair.