1031 Identification Rules — The 3-Property, 200%, and 95% Rules

Within 45 days of your sale closing, you must deliver a signed, written list of candidate replacement properties to your qualified intermediary. Each property must be described unambiguously — a street address or legal description. The list must fit one of three formats:

The 3-property rule (what almost everyone uses)

Name up to three properties, at any price. You can buy one, two, or all three. There's no dollar limit — three skyscrapers is fine. This covers the vast majority of exchanges: your first-choice property plus one or two backups in case a deal falls through.

The 200% rule (for bigger shopping lists)

Want to name more than three? You can list any number of properties, as long as their combined value doesn't exceed 200% of what you sold for. Sold for $500,000? Your whole list can total up to $1,000,000. This suits investors splitting one sale into several small rentals, where three candidates isn't enough cushion.

The 95% rule (the escape hatch)

If you blow past both limits — more than three properties and more than 200% of your sale value — the identification is still valid only if you actually acquire at least 95% of the total value you listed. In practice that means buying essentially everything on the list, which is why this rule is rarely used on purpose. Think of it as the penalty for an overlong list, not a strategy.

Example You sell for $800,000. Under the 3-property rule you could list a $700,000 fourplex, a $900,000 fourplex, and a $2M apartment building — any prices, pick any of them. Under the 200% rule you could instead list six small rentals totaling up to $1.6M. List six rentals totaling $2M, though, and you've fallen into the 95% rule: you'd have to buy at least $1.9M of them.

Getting the letter right

In writing, signed by you, delivered to the intermediary (not just your agent) by midnight of day 45.
Unambiguous descriptions — street address or legal description. "A condo in the Summerlin area" doesn't count.
You can revoke and replace properties on the list any time before day 45. After day 45, the list is locked.
You can only buy what's on the list. A better deal that surfaces on day 60 is off-limits.

Find your exact day-45 date →Enter your closing date — weekends are flagged automatically

Common Questions

Can I change my identification list after submitting it?

Yes, freely — until day 45. You can revoke properties and add new ones as often as you like within the window. Once day 45 passes, the list is final.

Does property I already closed on count against the list?

Property you actually acquire within the 45-day window is treated as validly identified automatically. Many exchangers close on their replacement early and skip the letter entirely.

What happens if my identification letter is late or too vague?

The exchange fails. The intermediary holds your funds until the exchange period ends, then returns them to you, and the sale is taxed as a normal sale. Vague descriptions are treated the same as no identification.