Identification Rules for a 1031 Exchange

Follow these guidelines when deciding whether your properties (or prospective properties) qualify for a tax-free 1031 Exchange.

When Must I Identify?

Within 45 days of the close of escrow for the relinquished property, it is essential to identify the replacement property or properties.

Who Can I Identify To?

As per the IRS guidelines, the identification of the replacement property must be in written form, signed by you, and delivered to a relevant party involved in the exchange, such as the qualified intermediary.

What constitutes a Valid Identification?

For an identification to be considered valid, it is necessary to provide clear descriptions of the replacement properties. In the context of real estate, this entails including the legal description, street address, or any distinctive name that identifies the property, along with the proposed purchase price.

What Are the Identification “Rules”?

There are three distinct methods of identification available, but it's important to note that you can only select one. These methods include the "three property" rule, the "200%" rule, and the "95%" rule. For detailed information regarding these identification rules, please contact us at
(619) 436-1031 for details.

If I cannot Purchase Property That I Identify, Can I Substitute Other Properties?

During the 45-day identification period, the taxpayer has the opportunity to make corrections or substitutions to their initial identification. However, once the taxpayer has passed the 45-day identification period, it is not possible to substitute or replace the identified property with any other property.