What is the law and underlying Internal Revenue Code?
Are there any related court cases?
Would household number 2 recognize a taxable gain to the extent of cash received?
Household one reports on Schedule D that the gold was sold for an amount equal to the value of the platinum minus the amount of cash. House one reports on Schedule D that its basis was whatever the gold cost originally. Household one's gain (on the sale of the gold) is the the value of the platinum minus the amount of cash minus the basis in the gold.
Household two reports the exchange of the platinum for proceeds equal to the value of the gold plus the amount of cash. Household two reports its basis in the platinum (whatever the platinum originally cost). Household two's gain is the the value of the gold plus the amount of cash minus the basis in the platinum.
this might be considered a 1031 exchange except that it is between related parties, or is that what you mean by 2 households?