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>They now wish to sell this rental property that is now worth about $170,000. They are nearing retirement age. I have heard (and know little ) about a situation where you can swap "like" real estate holdings. Is this something they can pursue or does anyone have any suggestions to avoid a large tax windfall.

Congratulations on your first post!

The swap like real estate provision is an IRC 1031(a)(3) Starker delayed tax-deferred exchange. Here's a short description:

Do they want to solve some landlording problem by getting out of the property? If not, do they need cash? Maybe they could borrow against the house value at today's low rates. None of the loan proceeds would be taxed

If they don't need cash right away, and aren't having a landlording problem, is there any need to dispose of the property now?
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