Identification · not tax or legal advice

1031 identification rules (3-property / 200% / 95%)

You have to identify replacement property in writing within the identification period. The regulation then limits how much you may identify unless you actually acquire almost all of it. The three named alternatives are the 3-property rule, the 200-percent rule, and the 95-percent fallback. This page restates Treas. Reg. §1.1031(k)-1(c). It does not pick a strategy, and it does not decide whether a street address on a text message is enough.

It has to be written, signed, and sent

Treas. Reg. §1.1031(k)-1(c)(1): replacement property is treated as identified only if it is unambiguously described in a written document signed by the taxpayer and sent before the end of the identification period. Real property is generally unambiguous if specified by a legal description, street address, or distinguishable name (an apartment building’s name, for example).

Paragraph (c)(2): the writing is sent to a person involved in the exchange other than the taxpayer or a disqualified person. Sending it only to your agent does not satisfy (c)(2). The qualified intermediary is the usual recipient. The45-day clockis midnight of the 45th day after the relinquished transfer.

3-property rule

Treas. Reg. §1.1031(k)-1(c)(4)(i)(A): the taxpayer may identify three properties without regard to the fair market values of the properties. This is a count of identified properties, not a count of deeds you must close. Identifying a fourth property takes you out of this alternative unless another alternative saves the identification.

200-percent rule

Treas. Reg. §1.1031(k)-1(c)(4)(i)(B): the taxpayer may identify any number of properties as long as the aggregate fair market value of the identified properties as of the end of the identification period does not exceed 200 percent of the aggregate fair market value of all the relinquished properties as of the date they were transferred by the taxpayer. Value here is the regulation’s fair-market-value test, not your list price or your lender’s appraisal unless those happen to be the same number counsel will use.

95-percent fallback

Treas. Reg. §1.1031(k)-1(c)(4)(ii): if the taxpayer identifies more properties than the 3-property and 200-percent alternatives allow, the identification is treated as not satisfying (c)(4) — except that identified properties the taxpayer actually receives before the end of the exchange period still count if the taxpayer receives identified replacement property constituting at least 95 percent of the aggregate fair market value of all identified replacement properties. This is a receive-almost-everything rule, not a license to list a county.

Incidental property and revocation

Treas. Reg. §1.1031(k)-1(c)(5): property that is incidental to a larger item (for example, furniture in an apartment building) is treated as part of that item if, in standard commercial transactions, the property is typically transferred together in a standard commercial transaction, and the aggregate fair market value of the incidental property does not exceed 15 percent of the larger item’s aggregate fair market value. Do not treat that 15 percent as a boot budget. Boot isa different page.

Paragraph (c)(6): an identification may be revoked if the revocation is in a written document signed by the taxpayer and sent to the person to whom the identification was sent, before the end of the identification period. An identification made in a written agreement (for example, the exchange agreement) may be revoked only in a written amendment or in a written document sent to all parties to that agreement.

FAQ

What is the 3-property rule?

Treas. Reg. §1.1031(k)-1(c)(4)(i)(A): the taxpayer may identify three properties without regard to their fair market values. Identifying a fourth property, unless another alternative applies, means the identification does not satisfy this alternative.

What is the 200-percent rule?

Treas. Reg. §1.1031(k)-1(c)(4)(i)(B): the taxpayer may identify any number of properties as long as their aggregate fair market value as of the end of the identification period does not exceed 200 percent of the aggregate fair market value of all the relinquished properties as of the date they were transferred.

What is the 95-percent rule?

Treas. Reg. §1.1031(k)-1(c)(4)(ii)(B): if the taxpayer identifies more property than the 3-property or 200-percent alternatives allow, the identification still works for the properties received if the taxpayer receives identified replacement property constituting at least 95 percent of the aggregate fair market value of all identified replacement properties before the end of the exchange period.

Does telling my broker count as identification?

Treas. Reg. §1.1031(k)-1(c)(2) requires a written document signed by the taxpayer and hand-delivered, mailed, telecopied, or otherwise sent before the end of the identification period to a person involved in the exchange other than the taxpayer or a disqualified person. Notice solely to a person who is the taxpayer’s agent is not enough under (c)(2). The QI is the usual addressee. Ask counsel before you treat a listing-agent email as the identification.

Sources

26 U.S.C. §1031(a)(3)(A) — 45-day identification. Cornell LII §1031. Accessed 2026-09-11.
Treas. Reg. §1.1031(k)-1(c) — 26 C.F.R. §1.1031(k)-1. Written identification; (c)(4) alternatives; incidental property; revocation. Accessed 2026-09-11.

Editorial access date: 2026-09-11. This page is not tax, legal, or investment advice.