I would search the BP forums because your tax / legal related questions likely have already been asked.However, it doesn't hurt to still ask the forum what your questions are.

Also, most Umbrella Policies only pay out if your underlying policy pays out, and the underlying policy will do everything they can to find an exclusion or that you were negligent (which you probably were) in the cause of action to get out of paying the claim.

Congratulations, you get to share your partners tax burden and pay the depreciation recapture at ordinary income rates. 

On your tax return you would report the proceeds, subtract costs and proceeds paid to seller, then the remaining profit would be your flat fee.

So the question becomes based on their individual and personal tax situation what is the estimated tax burden they'd save? 

The fact that you have a TAX-FREE income is crazy good.  

Being a real estate professional allows you to treat the income as non-passive, allowing higher high income tax payers to pay less in taxes.

You need to have the income and tax liability to support the depreciation.

High taxes.

They remit the taxes.