DEAR BOB: I am an avid reader, but have never seen you write about an even exchange of properties. My son and I both own rental houses. Both houses are of equal value, paid for, with no mortgage on either one. No cash will be involved in the transaction. I want to exchange my house for his rental house so my wife and I can then move into it; it is a one-floor house, whereas our current home has two stories. For health reasons, I need to live in a one-story house. If we make this trade, will there be any Internal Revenue Service complications? --Justin D. DEAR JUSTIN: There is no problem with an even exchange of one rental house or another rental house such as you contemplate under Internal Revenue Code 1031. However, because you are "related parties," if either of you sells the property acquired in the tax-deferred exchange within 24 months after acquisition, your sale profit will be taxed back to the original owner. Purchase Bob Bruss reports online. Also, you should continue renting ...
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