I have some 17x7 ET49 Volvo wheels that I'd like to put on my '86 240. I've been researching to try to find a good wheel spacing. Should I try to keep the spacing around the 20mm offset, which would demand a 29mm spacer? Any ideas?

Sounds about right.

It will benefit from thicker spacers on the rear, to make the front and read tracks closer to equal. This is a win both aesthetically and for handling.
I recall most people aiming for an extra 7mm on each side of the rear (compared to the front), but I also recall going a fair bit more than that on the rear of my 244 rally car.

Be aware that the wagons have a slightly wider diff, so the “best” rear spacers are a smidge narrower than they would on a sedan.

Your willingness to cut/fold the lip on the rear wheel arches is also important to the decision making process.

Note that any change in front track will affect steering axis offset with respect to contact patch center.

    John_Fraser if I aim to keep the front wheel offset at +20mm, is this something I will have to worry about?

    • Spac replied to this.

      Halon104 you’ll be fine.

      Big changes can cause issues, but you won’t feel the difference for anything within +/-10mm of the original on the front.
      On the rear, increasing the track makes the car handle better for enthusiastic driving.

      7 days later

      I was not aware of the difference in axle width between the sedan and wagon, can anyone confirm?

      Absolutely, front track difference is 20mm per side positive offset for 240. Obvious to the naked eye that front is wider than rear.
      Maybe at rear they had to create more space for snow chains?

      The 740 and 940 are 0mm track.