Replacement Property

What it means

The replacement property is the upleg — the property a 1031 exchanger acquires with proceeds held by the QI. It must be identified in writing within 45 days and acquired within 180 days, and it must be held for productive use in a trade or business or for investment.

An exchanger can acquire multiple replacement properties (including DST interests) as long as they comply with the chosen identification rule. The deferred gain rolls into the replacement's basis.