The 45-Day Rule: How to Identify Replacement Properties

## The 45-Day Identification Rule Explained After selling your relinquished property, you have exactly **45 calendar days** to identify potential replacement properties in writing. This deadline is strict—no extensions, no exceptions. ### Identification Rules The IRS provides three ways to identify replacement properties: #### 1. Three-Property Rule Identify up to **three properties** of any value. This is the most commonly used rule and provides the most flexibility for most investors. #### 2. 200% Rule Identify **any number of properties**, as long as their combined fair market value doesn't exceed 200% of the relinquished property's sale price. #### 3. 95% Rule Identify **any number of properties** of any value, but you must acquire at least 95% of the total value identified. This rule is rarely used due to its complexity. ### Best Practices - **Start early**: Begin your property search before closing on your relinquished property - **Identify backup properties**: Use all three slots if using the Three-Property Rule - **Be specific**: Include property addresses and legal descriptions - **Document everything**: Send identification to your QI in writing before midnight on day 45 ### Common Mistakes to Avoid 1. Missing the deadline (even by one day) 2. Identifying properties verbally instead of in writing 3. Not having backup properties identified 4. Failing to send identification to the Qualified Intermediary ### Pro Tip The 45-day clock starts the day after your relinquished property closes. Mark your calendar immediately and set multiple reminders. **Need help with your identification strategy?** Savvy 1031 can guide you through the process.