Tax Implications of Quit Claiming to Other Entities

[Matthew B.]

I was originally posting this for my parents, but the more I think about it, the more I want to know for myself.

My parents have around 15 or so rental properties owned by a single S-Corp which also owns a non real estate related business. An attorney recommended that the rentals be transferred into 2-3 LLC's, away from the non real estate related business.

My parent's accountant is telling them that the S-Corp must sell each rental to the LLC's at full market value and that capital gains taxes must be paid.

Is this true and is there a way to transfer properties between entities without paying capital gains? Could the properties be quit-claimed? I've quit-claimed properties to other entities before without thinking about the tax implications.