1031 Exchange Questions - Replacement Properties

How many replacement properties can I identify?

There are three options for identifying replacement property.  By far the most common option is the “three property rule” which allows the exchanger to identify up to 3 qualifying properties regardless of value.  Another option is the “200% rule” where any number of properties can be identified as long as the total aggregate value does not exceed 200% of the relinquished property sales price.  The third choice is the 95% rule allowing any number of properties of any value to be identified but 95% of the total value of identified properties must be purchased. 

A person using a 1031 Exchange must choose one of these three options and submit their identification in writing to the accommodator prior to the end of the 45^th day from the close of the relinquished property.  Prior to that 45^th day deadline the identification can be altered if needed and properties can be added to or removed from the identification form.  The essential fact to plan for is that the identification form cannot be altered in any way after day 45.  To reduce some pressure of this timeline it is advisable to begin locating possible replacement property even before the closing of the relinquished property. 

Contact the 1031 Exchange Specialist or call us at 866-405-1031