Replacement Property Identification

The identification list is the single most consequential document in an exchange, and it has to be right the first time. We help exchangers build that list against real diligence, not a rushed guess made in the final days of the 45-day window.

What the Identification List Actually Requires

The exchanger has to identify replacement property in writing to the qualified intermediary within 45 days of the relinquished property's closing, using an unambiguous description such as a legal description or clear street address. A vague description invites a dispute later, so we make sure every property on the list is described the way the rules expect.

Exchangers can use the three-property rule to name up to three properties regardless of value, the 200 percent rule to name more properties as long as their combined value does not exceed twice the relinquished property's value, or the 95 percent rule if they intend to acquire at least ninety-five percent of the value identified. Each rule fits a different situation, and we help the exchanger and their advisor pick the one that matches the deal in front of them.

We have watched exchangers pick the wrong rule for their situation simply because nobody laid out the tradeoffs plainly before the deadline pressure set in, so we try to have that conversation early, while there is still time to adjust the list.

Building a List with Real Backups

A list with only one property on it leaves no room for a financing delay, a failed inspection, or a seller who gets cold feet. We push exchangers toward at least one credible backup, even under the three-property rule, so a single problem does not sink the whole exchange.

We evaluate primary and backup candidates side by side, using the same diligence standard for both, so a backup property is a real option rather than a placeholder added just to satisfy the paperwork.

This matters across Tennessee's varied submarkets, since a backup property in a smaller market like Cookeville or Columbia needs the same title and lease review as a primary candidate near Nashville, even though the price points and buyer pools look nothing alike.

Diligence Behind Every Listed Property

• title and survey review for any listed property
• lease or occupancy status confirmed directly, not from a marketing flyer
• debt replacement value checked against the relinquished property
• physical condition walk-through or recent inspection report
• seller timeline confirmed to fit inside the 180-day exchange period

Timing the Work Around the Deadline

We start building the candidate list before the relinquished property even closes, working from the exchanger's target asset type, debt replacement need, and Tennessee submarket preference. That way the 45-day window is spent confirming and narrowing, not starting from a blank page.

Because the identification notice has to reach the qualified intermediary in writing before midnight on day 45, we build in a buffer of several days so a delivery problem never becomes an exchange-ending problem.

We also keep a short log of every property considered and dropped along the way, since that record can matter if a question ever comes up about why a particular property was or was not on the final list.

Where Advisors Fit In

We do not decide which identification rule best fits an exchanger's tax situation, and we do not give tax advice. That decision, along with any boot exposure or debt replacement analysis, belongs with the exchanger's CPA and the qualified intermediary. Our role is making sure the properties on the list have already been vetted enough that the final decision is a real choice, not a guess.

When an exchanger's advisor asks for supporting documentation on a listed property, we can usually turn it around quickly because the diligence work happened well before the identification deadline rather than as a last-minute scramble.

Common 1031 Exchange Questions

Can we change the identification list after the 45th day?

No. Once the 45-day window closes, the identification list is generally locked. That is exactly why we push for the list to be settled with real diligence well ahead of the deadline.

Which identification rule should we use?

That depends on how many properties you want to hold open and their combined value relative to the relinquished property. We lay out how each rule applies to your specific numbers, but the final choice should be confirmed with your tax advisor before the list is finalized.

Do all properties on the list need to be under contract?

No, identification does not require a signed purchase contract, only a clear written description delivered to the qualified intermediary within the 45-day window. Being under contract does make the diligence easier to complete on schedule and reduces uncertainty.

What happens if we identify a property and then it falls through?

If a backup property was properly identified, the exchanger can move to it. This is exactly why we recommend real backup options rather than a single named property with no fallback plan in place.

How many properties can we realistically diligence in 45 days?

It depends on complexity, but three well-vetted properties is usually more manageable than a longer list under the 200 percent rule unless the exchanger has help running diligence on all of them in parallel, which is exactly the coordination we provide throughout the window.

Ready to organize the exchange file?