CPA-led 1031 exchange guide
The 45-Day Identification Rule
Within 45 calendar days of the relinquished property closing, you must deliver a written, signed identification of replacement candidates to the Qualified Intermediary. This single document determines what you can and cannot buy.
Form and delivery
The identification must be in writing, signed by you, and delivered to the QI (not your real estate agent, not your attorney, not your CPA). Email or fax is fine; verbal identification does not count.
The three identification methods
You choose one method and stay within it.
- 3-Property Rule — identify up to 3 properties, regardless of value
- 200% Rule — identify any number of properties as long as the combined fair market value does not exceed 200% of the relinquished sale price
- 95% Rule — identify any number of properties of any value, but you must close on 95% of the identified value
Common mistakes
The biggest failure modes are missing the midnight Day 45 cutoff and giving vague descriptions like 'a duplex in Phoenix.' The IRS expects a specific property.
Frequently Asked Questions
Can I change my list after Day 45?
No. Once midnight Day 45 passes the list is final. You can only close on properties already identified.
What if a property I identified falls out of contract?
You can pursue another property on your list. You cannot substitute a new one after Day 45.