Liabilities increase the basis in the partnership.The allocation of the loan might increases your basis in the partnership but not your partner. 

This price increase kicked me in the butt and made me do it.

Today, those Studios rent for $1,900 each.So each apts moved from $500 to $1,900 in 17 years for a increase in rent of $1,400.If you bought a cash flow property outside NYC that was cash flowing $500 per month, but only doubled in the 17 years to $1k per month, you would still be short $400 per month because your rent increased $1,400 versus your outside cash flow property which only increased $1k.I can't emphasize that if you instead bought our place to live here rather than rent, you should think of it as hey, I'm actually doing better than the above scenario of buying outside cash flowing properties!

If you have the ability to make any changes to your current property that will increase the value, you may want to consider those as well. 

I am trying to figure out how to exit this investment with limited tax liabilities, each property has increased in value by 500% since I purchased them. 

Your way around it if it is fix and flip is to just do work that will increase the appraisal: improve curb appeal, enhance the kitchen or bath, or turn it into an open concept.

She also stressed  the importance of getting a sofa bed to increase the number of occupants so you can charge more.As for furniture, I would also recommend looking on Craigslist and garage sales for more unique and higher quality furniture than what you would get at IKEA...Good luck!

off the PRo membership before the rate increase happens tonight. 

Increase in Real Estate investors going after a shrinking REO market. 

You will also want to do research on the rental rates in the area and ask yourself if you think you can get more than what is currently being received, or if you are capped out on increasing the income through rental increases.