" Identification Rules "
IRC regulations for §1031 Exchanges place strict limits on the number of properties that may be identified as replacement properties. There are three rules that may be applied, which are independent of each other so the Taxpayer may choose the rule that best applies to the circumstances. The Three-Property Rule – Identify three replacement properties without regard to the fair market value of the properties. You may identify up to three properties, but are only required to purchase one. The 200% Rule – Identify any number of properties (more than 3) so long as their aggregate fair market value does not exceed 200% of the fair market value of the relinquished property. The 95% Rule – Identify any number of properties (more than 3) without regard to their aggregate fair market value so long as the taxpayer received identified replacement properties constituting at least 95% of the aggregate fair market value of all identified replacement properties by the 180th day. Written identif