Posted by Craig (IL) on August 31, 2003 at 22:20:12:
If you and your sister are trading properties that you live in, then there should be no tax problem. Consult an attorney to set this up. You may be able to avoid paying tranfer taxes too. There are various was to do this, none of them difficult for an experienced real estate attorney. Consider placing both properties in seperate trusts and swaping beneficiaries.
Income taxes MIGHT be an issue if you and your sister are talking about income property. Again, a good attorney can advise the best way to do this. Note that 1031’s are not cheap to set up.