How to Identify 1031 Replacement Property (The 45-Day Form)
To identify 1031 replacement property, deliver a written, signed identification to your Qualified Intermediary by midnight on day 45 after the relinquished property closes, using street address, legal description, or APN, under the Three-Property Rule, 200% Rule, or 95% Rule.
Before you start
The 45-day identification is the first do-or-die deadline of a 1031 exchange. Missing it kills the exchange. Here's the mechanics and best practices.
What you need
- Identification form provided by your QI
- Specific property information (address, APN, legal description)
- Decision on which identification rule you'll use
Steps
- Step 01
Know your day 45 deadline
Day 1 is the day after your relinquished property closes. Day 45 is 45 calendar days later (weekends and holidays count). Mark this date the day of closing; set 7-day, 3-day, and 1-day reminders.
- Step 02
Choose an identification rule
Three-Property Rule (up to 3 properties, any value — the most common choice). 200% Rule (any number of properties as long as combined FMV ≤ 200% of downleg price). 95% Rule (any number, any value, but must acquire 95% — rarely used, easy trap).
- Step 03
Request your QI's identification form
Every QI provides a standard identification form. Request it well before day 45 — waiting until day 44 leaves no time for errors. The form contains the legal language required for IRS acceptance.
- Step 04
Describe properties precisely
For each property, include street address AND one of: legal description, APN/parcel number, or unit/lot identifier. 'A similar Walgreens in Dallas' does not satisfy IRS unambiguity requirements. 'The property located at 1234 Elm Street, Dallas, Texas 75201, APN 12-34-567' does.
- Step 05
Identify at least 2-3 backup properties
Even if you fully intend to close on your primary candidate, identify 2-3 total. The Three-Property Rule gives you 3 free — use all 3. Include your primary candidate, a viable secondary candidate, and ideally a DST interest as an emergency fallback.
- Step 06
Sign and date the form
The taxpayer (or authorized representative) must sign the identification form. Signature date should be on or before day 45.
- Step 07
Deliver to QI with proof
Deliver by a method that creates proof: tracked email with PDF attachment (most common), certified mail with return receipt, or confirmed electronic submission via QI portal. Keep the proof of delivery — audit defense.
- Step 08
Verify QI receipt
Follow up within 24 hours to confirm QI received the form. Get written confirmation. If anything looks wrong (incorrect property description, missing signature), correct before day 45.
Common mistakes
- Waiting until day 44 to draft the form
- Insufficient property description (no APN, no legal description)
- Identifying properties you have zero chance of closing (just to fill slots)
- Using the 95% Rule without being absolutely certain you'll close on 95% of combined value
- Not keeping proof of delivery
Frequently asked questions
Can I change my identified properties after day 45?
No. After midnight day 45, your identification list is frozen. You can only close on properties on the list. Revisions are allowed freely before day 45; frozen afterward.
What if my primary property is under contract but not yet closed on day 45?
The 45-day rule requires identification by day 45, not closing by day 45. The 180-day rule governs actual closing. As long as the property is identified on day 45, you have until day 180 to close on it.
Can I identify a property I haven't seen yet?
Yes. Identification is just naming the property, not contracting or closing. Some exchangers identify properties based on broker listings or LOI stage. However, not having done diligence before day 45 creates execution risk during the remaining 135-day window.