I have a client who has purchased 5 theatres. All have been within the last year except one theatre that has been owned by them since 8/16/2004: They have loans outstanding on 3 of the properties. He has 33% ownership in all and brother and mother have other 33% each. They are planning on selling all assets to another company which the FMV of all 5 theatres is around 2.5 million and they will get 1.75 million plus 49% share in another company they are creating. He also has 100% ownership in a night club (S Corp) that has a loss around$150K. They will have to recognize the FMV plus the loan payoff plus any boot on Schedule D correct? It is not considered a nontaxable transaction is it? I read about liquidating assets and was not sure if this is considered liquidating because they are starting a new company which will own all 5 theatres?