Glossary

The 45-day identification period is the first of two federal deadlines in a 1031 exchange. You have until midnight on the 45th day after your sale closes to identify possible replacement properties. The day after closing counts as Day 1, and weekends and holidays count and do not extend the deadline.

How Identification Works

The identification must be in writing, signed by you, and delivered to your Qualified Intermediary or another person involved in the exchange who is not a disqualified party. Most investors identify under one of three rules:

• Three-property rule: identify up to three properties of any value.
• 200% rule: identify more than three properties, as long as their combined value does not exceed 200% of the value of the property you sold.
• 95% rule: identify any number of properties of any value, but you must then acquire at least 95% of the combined value you identified.

You can revoke and replace an identification in a signed writing delivered to the same person, but only before the 45 days end. After Day 45, the list is final. If you do not identify property within 45 days, the exchange generally fails.

To learn more, find your 1031 exchange deadlines.