How Do I Identify Exchange Property?
According to Internal Revenue Service regulations,there are stringent requirements regarding identification of replacement property for 1031 exchanges. The requirements must be met within 45 days from the date you transferred your exchange property. Identification of all replacement property must be made in writing and signed by you within that time frame. You may identify as many as three properties, regardless of their total value or you may identify any number of properties provided their aggregate fair market value on that 45th day does not exceed 200% of the aggregate fair market value of all your relinquished property on the date of its transfer.
You may identify any type of investment or business property, single family home, duplex, apartment building, rental, hotel, office building, commercial building, vacant land and so on. You may identify property in anywhere in the United States. Your identification must be specific as to what you intend to purchase. For instance, if you were intending to buy only a percentage interest in a piece of property, you would need to identify it as such and if you intend to construct improvements, you must specifically describe the proposed improvements, along with listing the address or legal description of the property where the improvements will take place.
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