Can two homes be traded for one?

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DEAR BOB: What would be the process to trade two homes for one? The two homes are valued at $1.5 million total. The home for sale is valued at $1.2 million. The seller will trade. What is the first step to take? --Phyllis S. DEAR PHYLLIS: If I understand your question correctly, you want to trade two rental houses worth a total of $1.5 million for one rental house worth $1.2 million. That would be a partially taxable trade down because the two rental houses are worth $300,000 more than the one rental house being acquired. Purchase Bob Bruss reports online. This could get a bit complicated because there is the 25 percent depreciation recapture tax to consider in such a down trade. If the owner of the $1.2 million rental house is willing to take your two rental houses and pay you the $300,000 cash difference, that would be the easiest way to go. However, if he is not willing to pay you $300,000 cash, you should then consider selling the two rental houses in a Starker delayed tax-de...