How Do I Identify Replacement Property For My Exchange?

When you’re ready to complete a 1031 exchange, one of the first questions you probably have is how to find and identify replacement property. Failing to properly complete this step will jeopardize the exchange. The good news is that identifying replacement property is a relatively straightforward proposition. (Finding it, on the other hand, is the subject for another discussion.)

To properly identify potential replacement property, you must provide an “unambiguous description” of the property on or before the 45th day after closing on your relinquished property. A legal description or full property address is enough to satisfy IRS scrutiny.

In some instances, you may want to identify more than one replacement property. You are able to do so under one of the following scenarios:

1. Identify up to three replacement properties (of any value) with the intent of closing on at least one.
2. Identify more than three replacement properties so long as the aggregate value does not exceed 200% of the market value of the relinquished property.
3. Identify more than three replacement properties with an aggregate value in excess of 200% of the relinquished property’s market value, so long as 95% of the market value of all identified properties is actually acquired.

To find out how we can help you find and close on your next 1031 exchange property or to learn more about the exchange process and our qualified intermediary services, please visit our website,