Permanent Housing Swap

I have a house that I’ve had a difficult time selling and am interested in exploring the possibility of a housing swap. The home that I own was initially purchased as a flip and has a lot of equity in it. In particular, I am interested in the tax implications of a housing swap and if I were to find a home owner interested in such a transaction, would their home have to be owned clear of all liens as well?

Thanks so much.

From your tax perspective, it’s exactly as if you had been paid cash, except you receive another asset in lieu of cash. You’d need an appraisal of the property you receive to establish market value.

It would need to be clear of liens, unless you are prepared to put enough cash into the deal to pay off the loans or willing to assume the loans. This changes the math somewhat, but the basic principle is the same.

value of property received minus cash put in (or loans assumed) = net value received.
net value received - cost of property given up = income/loss.
Note that as a flip, this is not a capital gain transaction.