If you want to do the easiest 1031 exchange identification rule (the 3 property rule), you identify three or fewer properties. You could identify the IDS Center, the Foshay Tower, and the Mall of America. It doesn’t matter that these three properties are extremely expensive. What matters is that they are three properties. There is no valuation cap when using the three property rule.
There’s an alternative rule that you can use called the 200% rule. With this rule you can identify more than three properties but you have a value cap. If you sell your relinquished property for a million dollars, using the 200% rule you double the value of your relinquished property to find your ceiling, which would be 2 million dollars in this example.
Lastly, there is the 95% rule. This rule is typically only used when identifying a big portfolio of properties. Under this rule, as long as you actually receive at least 95% of the value of your identified properties, your 1031 exchange is still valid.
Find a 1031 Intermediary to Help with Your Like-Kind Exchange
If you’re searching for a qualified intermediary you can trust to help with your 1031 exchange, look no further! CPEC1031, LLC has the skills and experience needed to ensure your like-kind exchange is a success. We have more than twenty years of experience facilitating exchanges under section 1031 of the Internal Revenue Code. We can help you through all the steps of your like-kind exchange of real estate. Contact us today at our downtown Minneapolis office to learn more. 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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