There are many things to keep in mind when identifying your 1031 replacement property. In this article, we are going to discuss three important things to remember when identifying replacement property in your 1031 exchange.
Identification Deadline
First, it’s important to remember your deadlines and time periods for the exchange. You have 180 days to complete your exchange, beginning the day after you sell your relinquished property. The first 45 days of that period is your identification period. You have to identify in writing all of your intended replacement properties by this deadline.
3 Property & 200 Rules
In most 1031 exchanges, the exchangor can identify up to three replacement properties. If he or she wants to identify more than three properties, the exchangor can use the 200% rule. Using this rule, the taxpayer can identify any number of replacement properties so long as the total fair market value of those replacement properties in no greater than 200% of the relinquished property.
Acquiring Property in the Identification Period
If you actually acquire any of your replacement properties in the midst of your 45 day exchange period, those properties are deemed to have been identified.
MN Qualified Intermediary Services
CPEC1031 has over twenty years of experience helping taxpayers with their 1031 exchanges in Minnesota and across the country. Our qualified intermediaries will work with you through every stage of your 1031 exchange – from the sale of your relinquished property, to the purchase of your replacement property. Reach out to us today to chat about your 1031 exchange. Our primary office is located in downtown Minneapolis but we work with clients throughout the state of Minnesota and across the United States.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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