Reposition investment property without a current tax bill
A like-kind exchange defers federal tax, and Washington's real-estate exemption means there is no state layer to begin with. An Eastside rental can be repositioned with no current tax at either level.
How it works
Sell the relinquished property, identify replacements within 45 days, close within 180, and keep the proceeds with a qualified intermediary throughout. I coordinate the process end to end; the intermediary holds the funds. Miss a deadline and the deferral is gone, so the calendar is managed like a closing checklist from day one.
What owners use it for
Trading out of tired assets into stronger submarkets: the aging triplex into two newer Eastside rentals, the high-maintenance single-family into a professionally managed property, the low-yield holding into one that actually cash-flows. Deferred tax stays invested and working.
The endgame
Held until death, exchanged property passes to heirs with a stepped-up federal basis, and the deferred gain is never recognized. That connects this service directly to estate planning, and it is why exchange decisions deserve your CPA and attorney at the table.
This is not tax or legal advice. Aditya Kasturi is a licensed real estate broker, not a CPA, attorney, or financial advisor. Figures are illustrative, based on Washington and federal law as understood at the time of writing, and laws change. Confirm any strategy on this page with your CPA and, where relevant, your estate planning attorney before acting.
Common questions
Does this work for my primary home?
No. Primary residences use the federal Section 121 exclusion instead: $250K single, $500K married, when the ownership and use tests are met.
Can I exchange a short-term rental into a long-term rental?
Generally yes, provided both are held for investment. The intent rules have nuance; your CPA confirms your facts before we structure it.
What about reverse exchanges?
Buying the replacement before selling is possible and more expensive to structure. In a thin-inventory market it is sometimes worth it. We price both paths before choosing.
Start with your numbers
Tell me where you are in the decision and I'll come back with real figures, not a pitch.