diff --git a/app/upgrade_test.go b/app/upgrade_test.go
deleted file mode 100644
index 4f42ce4cbe5..00000000000
--- a/app/upgrade_test.go
+++ /dev/null
@@ -1,27 +0,0 @@
-package app_test
-
-import (
-	"testing"
-	"time"
-
-	sdk "github.com/cosmos/cosmos-sdk/types"
-	"github.com/osmosis-labs/osmosis/app"
-	"github.com/stretchr/testify/suite"
-	tmproto "github.com/tendermint/tendermint/proto/tendermint/types"
-)
-
-type UpgradeTestSuite struct {
-	suite.Suite
-
-	ctx sdk.Context
-	app *app.OsmosisApp
-}
-
-func (suite *UpgradeTestSuite) SetupTest() {
-	suite.app = app.Setup(false)
-	suite.ctx = suite.app.BaseApp.NewContext(false, tmproto.Header{Height: 1, ChainID: "osmosis-1", Time: time.Now().UTC()})
-}
-
-func TestKeeperTestSuite(t *testing.T) {
-	suite.Run(t, new(UpgradeTestSuite))
-}
diff --git a/app/upgrades/v4/upgrade_test.go b/app/upgrades/v4/upgrade_test.go
new file mode 100644
index 00000000000..e70bf821014
--- /dev/null
+++ b/app/upgrades/v4/upgrade_test.go
@@ -0,0 +1,128 @@
+package v4_test
+
+import (
+	"fmt"
+	"strconv"
+	"strings"
+	"testing"
+	"time"
+
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	upgradetypes "github.com/cosmos/cosmos-sdk/x/upgrade/types"
+	"github.com/osmosis-labs/osmosis/app"
+	v4 "github.com/osmosis-labs/osmosis/app/upgrades/v4"
+	"github.com/stretchr/testify/suite"
+	abci "github.com/tendermint/tendermint/abci/types"
+	tmproto "github.com/tendermint/tendermint/proto/tendermint/types"
+)
+
+type UpgradeTestSuite struct {
+	suite.Suite
+
+	ctx sdk.Context
+	app *app.OsmosisApp
+}
+
+func (suite *UpgradeTestSuite) SetupTest() {
+	suite.app = app.Setup(false)
+	suite.ctx = suite.app.BaseApp.NewContext(false, tmproto.Header{Height: 1, ChainID: "osmosis-1", Time: time.Now().UTC()})
+}
+
+func TestKeeperTestSuite(t *testing.T) {
+	suite.Run(t, new(UpgradeTestSuite))
+}
+
+const dummyUpgradeHeight = 5
+
+func (suite *UpgradeTestSuite) TestUpgradePayments() {
+	testCases := []struct {
+		msg         string
+		pre_update  func()
+		update      func()
+		post_update func()
+		expPass     bool
+	}{
+		{
+			"Test community pool payouts for Prop 12",
+			func() {
+				// mint coins to distribution module / feepool.communitypool
+
+				var bal = int64(1000000000000)
+				coin := sdk.NewInt64Coin("uosmo", bal)
+				coins := sdk.NewCoins(coin)
+				err := suite.app.BankKeeper.MintCoins(suite.ctx, "mint", coins)
+				suite.Require().NoError(err)
+				err = suite.app.BankKeeper.SendCoinsFromModuleToModule(suite.ctx, "mint", "distribution", coins)
+				suite.Require().NoError(err)
+				feePool := suite.app.DistrKeeper.GetFeePool(suite.ctx)
+				feePool.CommunityPool = feePool.CommunityPool.Add(sdk.NewDecCoinFromCoin(coin))
+				suite.app.DistrKeeper.SetFeePool(suite.ctx, feePool)
+
+			},
+			func() {
+				// run upgrade
+				suite.ctx = suite.ctx.WithBlockHeight(dummyUpgradeHeight - 1)
+				plan := upgradetypes.Plan{Name: "v4", Height: dummyUpgradeHeight}
+				err := suite.app.UpgradeKeeper.ScheduleUpgrade(suite.ctx, plan)
+				suite.Require().NoError(err)
+				plan, exists := suite.app.UpgradeKeeper.GetUpgradePlan(suite.ctx)
+				suite.Require().True(exists)
+
+				suite.ctx = suite.ctx.WithBlockHeight(dummyUpgradeHeight)
+				suite.Require().NotPanics(func() {
+					beginBlockRequest := abci.RequestBeginBlock{}
+					suite.app.BeginBlocker(suite.ctx, beginBlockRequest)
+				})
+			},
+			func() {
+				var total = int64(0)
+
+				// check that each account got the payment expected
+				payments := v4.GetProp12Payments()
+				for _, payment := range payments {
+					addr, err := sdk.AccAddressFromBech32(payment[0])
+					suite.Require().NoError(err)
+					amount, err := strconv.ParseInt(strings.TrimSpace(payment[1]), 10, 64)
+					suite.Require().NoError(err)
+					coin := sdk.NewInt64Coin("uosmo", amount)
+
+					accBal := suite.app.BankKeeper.GetBalance(suite.ctx, addr, "uosmo")
+					suite.Require().Equal(coin, accBal)
+
+					total += amount
+				}
+
+				//check that the total paid out was as expected
+				suite.Require().Equal(total, int64(367926557424))
+
+				expectedBal := 1000000000000 - total
+
+				// check that distribution module account balance has been reduced correctly
+				distAddr := suite.app.AccountKeeper.GetModuleAddress("distribution")
+				distBal := suite.app.BankKeeper.GetBalance(suite.ctx, distAddr, "uosmo")
+				suite.Require().Equal(distBal, sdk.NewInt64Coin("uosmo", expectedBal))
+
+				// check that feepool.communitypool has been reduced correctly
+				feePool := suite.app.DistrKeeper.GetFeePool(suite.ctx)
+				suite.Require().Equal(feePool.GetCommunityPool(), sdk.NewDecCoins(sdk.NewInt64DecCoin("uosmo", expectedBal)))
+
+				// Check that gamm Minimum Fee has been set correctly
+				gammParams := suite.app.GAMMKeeper.GetParams(suite.ctx)
+				expectedCreationFee := sdk.NewCoins(sdk.NewCoin("uosmo", sdk.OneInt()))
+				suite.Require().Equal(gammParams.PoolCreationFee, expectedCreationFee)
+			},
+			true,
+		},
+	}
+
+	for _, tc := range testCases {
+		suite.Run(fmt.Sprintf("Case %s", tc.msg), func() {
+			suite.SetupTest() // reset
+
+			tc.pre_update()
+			tc.update()
+			tc.post_update()
+
+		})
+	}
+}