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If you trade your house, how does it work? What if you have an exisiting mortgage or liens? Are they transferrable? Do you still pay taxes? What if there is a price difference or it's just an even swap? Just curious how it all works.
A trade would be considered a sale and a purchase for tax purposes.
You can sell your primary residence once every two years and have an income tax exclusion of $250,000 for each spouse up to a total of $500,000.
If you're trading your house with someone, I would just treat it as a sale and purchase and explain the situation to the realtors if any are involved, and/or to the title company so they can arrange a back to back escrow.
You would each have to get new mortgages.
If you're not using a realtor then I would recommend contacting an attorney that specializes in real estate law.
Location: Halfway between Number 4 Privet Drive and Forks, WA
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Basically, I'll buy yours if you buy mine....
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