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What Are The “45-Day Nomination Period” Rules For A 1031 Exchange?

What Are The “45-Day Nomination Period” Rules For A 1031 Exchange?
According to Section 1031 of the IRC, it is mandatory for an exchanger to identify replacement property(ies) within 45 days from the closing of the sale of the relinquished property.This period is known as the “Identification Period” or the “45-Day Nomination Period”.
To complete a valid 1031 Exchange , you are required by the law to provide in writing, prior to midnight on the 45th day (after the close of your relinquished property) an “unambiguous description” of the potential replacement property(ies). A legal description or property address will usually suffice. If you want to identify or purchase multiple properties, you must follow one of the following rules established by the IRS:

3-Property Rule: You can identify up to three properties of any value with the intent of purchasing at least one of them,

200% Rule: You can identify more than three properties with an aggregate value that does not exceed 200% of the market value of the relinquished property.

95% Rule: You can identify an unlimited number for properties with an unlimited total value, but you must acquire 95% of the properties.


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