Equity transferred between LLCs of different ownership-Taxed?

[Ethan Cole]

This is hypothetical:
I have joined a partnership with one other individual to purchase a multi-unit building. For simplicity of argument, I have performed 100% of the maintenance and improvement of the property. My partner has performed 0%, and we both agree to that work distribution. After improvement, the property is now worth $100k more. Could I borrow against the new value of the building to obtain cash, and then use that cash to buy a building for myself? This would be using the equity from the partnership LLC to buy a property for my personal LLC. Though I would not think the interest on the $100k loan would be deductible to the partnership(not for the business use), would there be any tax to be paid for this transfer between LLCs? Is this to filed under IRS M-1?

It seems to me that some sort of tax would have to be paid, otherwise this would appear to be $100k in income personally. However, this is borrowed money which isn't really income. You don't pay taxes when you take out a mortgage (% of the mortgage).