Identification rules

The 45-day identification deadline is not just about being on time. It is about naming the right number of properties, within the right value limits, in the right written form. Miss the format and your identification is invalid even if you met the deadline, which collapses the whole exchange. The rules give you three ways to identify, and you have to stay entirely inside exactly one of them.

The written-and-delivered mechanics

First, the form. By midnight on day 45, your identification must be in writing, signed by you, and delivered to a party in the exchange, almost always your qualified intermediary. A verbal identification, an unsigned note, or one sitting in your own drawer does not count. Each property must be described unambiguously, a legal description or a clear street address, so there is no question which property you named.

One relief: any property you actually close on within the 45-day window is treated as identified automatically, you do not have to formally identify property you have already acquired. But it still counts against the identification limits below.

Identification must be written, signed, and delivered to your intermediary by day 45, with each property described unambiguously; anything less is invalid even if you were on time.

The three rules, and you pick one

Here is the part investors get wrong. You cannot name unlimited properties. The regulations give you three options, and you must stay completely within one.

The three-property rule is the default and the safest: you can identify up to three properties, regardless of their total value. Sell a $1 million property and you can still identify three properties worth $5 million each if you like, value does not matter under this rule. Most investors use it because it is simple and hard to mess up.

The 200% rule lets you identify more than three properties, any number, as long as their combined fair market value does not exceed 200% of the value of what you sold. Sell a $2 million property, and you can name as many properties as you want up to $4 million total. Go one dollar over $4 million and you have blown the rule.

The 95% exception is the escape hatch for when you have identified more than three properties worth more than 200%: it still works, but only if you actually acquire at least 95% of the total value of everything you identified. Miss that 95% and the whole identification fails. It is rarely used because the 95% acquisition requirement is punishing.

You get three choices: name up to three properties at any value, or unlimited properties up to 200% of what you sold, or unlimited properties if you actually buy 95% of what you named. Stay inside exactly one.

Why the three-property rule dominates

In practice, nearly everyone uses the three-property rule, and for good reason. It has no value ceiling to track, so you cannot accidentally bust a percentage limit, and three is usually enough: one primary target and two backups in case the deal falls through. The three-property rule’s real value is the backups. Since the identification deadline is absolute and you cannot add a property after day 45, identifying two fallbacks protects you if your first choice collapses, without exposing you to the value math of the 200% rule.

The 200% rule matters mainly when you are diversifying, splitting one large property’s proceeds across several smaller ones, and expect to buy four or more. Then you accept the value ceiling in exchange for naming more targets. The 95% exception is for the rare investor who wants to identify a large basket and intends to buy nearly all of it.

The bottom line

• By day 45, identify in writing, signed and delivered to your intermediary, with unambiguous descriptions.
• Property you close on within 45 days is auto-identified but still counts toward the limits.
• Three-property rule: up to three properties at any value, the default and safest.
• 200% rule: unlimited properties up to 200% of the relinquished value combined.
• 95% exception: unlimited at any value, but only if you acquire 95% of what you identified.

For the deadline itself, read timeline rules. For what happens if you buy less than you sold, see partial exchanges. For the full picture, start at the 1031 exchanges and exit planning hub.

Last verified August 2026.