This is why I am asking you all this question.  Seriously, I have never heard of being able to trade one  for another without having to report the gain.  It's reported on a 1099S as proceeds.  The party wrote me a note and said that this is not to be reported as income that its an exchange.  (I felt well if it was an internal exchange then why a 1099b)    In my mind, which could be wrong, It was like if you had a second home and sold it.. you must state what you bought it for and take any gain... and if you did buy a new one/exchange  that was your choice.  But on the other hand, I have been set straight with what Catholic Fathers can deduct off their pension and double dip on deducting the same expenses on their schedule A form.( And that was documented through the IRS to be allowed).   

So I thought maybe, this is something else I should be educated on, Regarding time share exchanges. I only put it on a Schedule D just to have it on the file right now.  But no I am not comfortable with it stating a wash out. 

Please if anyone can tell me if they are 100 percent wrong re: no tax/no gain applicable.