Rules & deadlines
The three 1031 identification rules, explained
By the 1031.com editorial team · Published September 4, 2026 · Updated September 16, 2026
The short answer
By midnight on day 45, identify replacement property in a signed writing delivered to a permitted party. You may identify up to three properties regardless of value, any number whose total value does not exceed 200% of what you sold, or more only if you ultimately acquire at least 95% of the value identified.
The 45-day rule is not simply a deadline to make a shortlist. Your identification must describe the replacement property clearly, be signed, and be delivered to your Qualified Intermediary or another permitted party before the period ends.
The regulations provide three alternative limits. Most exchanges use the first or second; the third is a difficult backstop, not a casual way to name everything on the market.
Rule 1: the three-property rule
You may identify up to three replacement properties without regard to their fair market value. You do not have to buy all three. This is the simplest and most common approach when an investor has a focused shortlist and wants backups in case the preferred purchase fails.
Rule 2: the 200% rule
You may identify any number of properties if their combined fair market value at the end of the identification period does not exceed 200% of the fair market value of the relinquished property or properties. This can help when an investor plans to purchase several smaller assets.
The value test applies to everything identified under this rule, so a long list of high-value backups can push the total over the limit even if you never intended to buy them all.
Rule 3: the 95% rule
If you exceed both the three-property and 200% limits, the identification can still work only if you receive replacement properties worth at least 95% of the aggregate fair market value of everything identified. Because that usually requires buying nearly the entire list, this rule is difficult to satisfy in practice.
What the written identification needs
- A written document signed by the taxpayer.
- An unambiguous description, such as a street address or distinguishable legal description for real property.
- Delivery before the end of day 45 to the QI or another permitted person involved in the exchange, not merely to the taxpayer's own agent.
- Any revocation or substitution must also be made in a signed writing within the same 45-day period.
Build a shortlist that can survive a failed deal
Treat every identified property as something you could realistically close on. Confirm availability, financing, due-diligence timing, and the seller's ability to perform before day 45. A backup that cannot close is not much of a backup.
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Frequently asked questions
- Can I change my identified properties after day 45?
- Generally no. The identification period has ended, so substitutions made afterward do not satisfy the safe-harbor rules. Confirm unusual facts with your QI and tax advisor.
- Do I have to purchase every property I identify?
- Not under the three-property or 200% rule. Under the 95% rule, however, you must acquire at least 95% of the total value identified.
- Does the 180-day period begin after day 45?
- No. Both periods begin when the relinquished property is transferred, so the 180-day clock is already running during the 45-day identification period.
Primary sources
We use primary government sources for the rules and eligibility statements in this guide.
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Educational information only, not tax, legal, or investment advice. 1031 rules and deadlines are strict and can change, so confirm with the IRS and your own CPA or attorney before acting. How we source content.