The 1031 45-Day Identification Rule: With Examples

Forty-five calendar days, no extensions, no excuses. The identification rules decide which properties you can buy, so learn them before you sell.

The deadline

The 45-day clock starts the day the relinquished property closes, not when it lists or goes under contract. Day 1 is the day after closing, and day 45 is the deadline, counting calendar days including weekends and holidays. There are no extensions for any reason except a federally declared disaster directly affecting the taxpayer, and even those are narrowly granted. Identify on day 46 and the exchange fails entirely.

How to identify properly

Identification must be in a signed writing delivered to the qualified intermediary (or another permitted party, like the person obligated to transfer the replacement property) before midnight of day 45. It must unambiguously describe the property: a street address or legal description for real estate. Vague descriptions like a nice duplex in Austin do not count. Email delivery with a read receipt is standard practice; keep proof of timely delivery.

The 3-property rule

Name up to 3 properties of any value, regardless of their total worth. Selling a $400,000 rental and identifying three $1 million properties is perfectly fine. You only need to close on one (or more) of them. This is the rule most exchangers use because it is simple and generous: three shots at finding the right deal.

The 200% rule

Name any number of properties as long as their combined fair market value does not exceed 200 percent of the relinquished property's value. Selling for $400,000, you could identify ten properties totaling $800,000. This suits exchangers diversifying into multiple smaller properties. Exceed 200 percent and the identification fails unless you fall back on the 95% rule.

The 95% rule

Name any number of properties of any value, but you must close on 95 percent of the identified value. Identify $2 million of property on a $400,000 sale and you must acquire at least $1.9 million of it. This rule exists as a safety net for exchangers who over-identify; relying on it deliberately is risky because a single failed closing can blow the 95 percent test.

Examples

Sell a $500,000 duplex. Under the 3-property rule, identify a $600,000 fourplex, a $450,000 triplex, and a $700,000 DST interest; close on the fourplex. Under the 200% rule, identify eight $100,000 condos ($800,000 total, under the $1 million cap) and close on five. Miss the deadline having identified nothing: the $150,000 gain is fully taxable, and the QI returns the proceeds.

Can you change the identification?

Yes, any time before midnight of day 45. Revoke an identification in writing and identify different property; only the identification in effect at the deadline counts. Smart exchangers identify backup properties early and swap if inspections or financing fail, always keeping the operative identification within one of the three rules.

Identification in practice: a timeline

Day 0: the relinquished property closes and the QI receives the proceeds. Days 1 to 14: tour replacements and make offers; send the first identification the moment you have a signed purchase agreement. Days 15 to 30: inspections and financing on the primary target; identify one or two backups in writing in case the first falls through. Days 31 to 44: finalize; if the primary target dies, revoke and re-identify around the backup. Day 45: the identification in effect at midnight is final. Exchangers who wait until week five to start looking are the ones who miss; the identification period rewards preparation done before the sale closed.

Sources: Treasury Reg. 1.1031(k)-1(c). Data current as of October 2026. Not tax or legal advice.

Frequently asked questions

How many days do I have to identify a 1031 replacement?

45 calendar days from the relinquished property closing, including weekends and holidays. There are no extensions except narrow disaster relief.

What is the 3-property rule?

You may identify up to 3 replacement properties of any total value within the 45 days. Most exchangers use this rule.

What is the 200% rule for 1031 identification?

You may identify any number of properties whose combined value does not exceed 200% of the relinquished property's sale price.

Can I change my 1031 identification?

Yes, any time before the 45-day deadline. Revoke in writing and re-identify; only the identification standing at the deadline counts.

What happens if I miss the 45-day deadline?

The exchange fails and the full gain becomes taxable. The qualified intermediary returns the proceeds.