Can you trade houses?

[Jennifer Spradling]

I own outright a SFR that appraised for $250,000.

I want to purchase a house listed at $230,000 (to become my primary residence).

Would there be negative tax implications to offer a property swap in this situation assuming the other investor is interested?

[Basit Siddiqi]

Originally posted by @Derek Dombeck:

You can trade deed for deed. You would carry you tax basis from your current property into the new residence. This should not create a taxable event.

This is wrong.
That does create a taxable event.

You may not even do a 1031 exchange in this scenario since you will be using the new property as a personal residence.