Arn has the right answer here. You will be walking a thin line if you try and deceive the government through a swap. If you are over 55, look into Prop. 60 and 90 regarding transferring your property tax to a new home. If you are under 55, then it will have to happen like Arn said-a sale of both properties at fair market value.

Mehdi,
I found some referances to swapping on some other blogs om http://www.activerain.com. I don't know if any of them are completely correct, but here are some possible sites to explore. I would also highly recommend consulting both a realtor and accountant if you do this.

http://activerain.com/blogsview/382300/House-Swapping-is-it-…
http://www.Pad4Pad.com

http://www.onlinehousetrading.com/default.aspx?AspxAutoDetec…

Good luck!

Marcy

Mehdi:

I assume you are talking about swapping personal residences.

The short answer is NO.
The "swap" would still be considered a sale and a purchase by each party.

Of course, you would need to negotiate out prices on both properties.
Keeping the negotiated prices in the "lower range" of fair market value could help lessen the potential capital gains tax and future property taxes on this "swap".
Much of the gain might already be sheltered anyway.
On a personal residence, a married couple gets $500K tax-free and a single perosn gets $250K tax free.
But there is nothing inherent in a swap that will reduce tax liability.

But I would strongly caution you to keep the agreed upon prices within a reasonable range of fair market value as determined by recent sales comparables. If the prices are artificially low then you could open yourself up to inquiry and audit from the IRS and the County Assessor's office. If it was then found there was fraudulent activity, you could be subject to legal action and penalty.

I would consult with BOTH an attorney and CPA prior to agreeing to any swap.

Good luck

Arn

You would need to speak with a CPA regarding the tax implications of a home "swap."

Dificult times require desperate measures and these are truly difficult times. One thing for certain, we expect to see more "swaps" in the near future since it becomes a very real option for people in situations such as yours.

At this point in time "swaps" are mot a common occurance and will require a more involved search. This will change.