Tax Liability on Ownership % Swap Between Tenants in Common?

[John Faranetta]

I own 8 residential rental properties with 3 other investors. The properties are owned equally between all 4 investors, and the Deeds are held as Tenants in Common.  We have decided to divide the properties amongst all 4 investors, who will then each own 100% of 2 properties, instead of 25% of 8.  Would the IRS consider this kind of transfer a sale, and therefore require capital gains taxes to paid, if this is not handled through 1031 Exchanges?  Thanks in advance.