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Q. How do I "Identify" my replacement property?
A. To qualify for an exchange, you must, generally, identify your replacement
property within 45 days of the day you sell your relinquished property. This is
a very strict rule - there are no extensions because of holidays, illness, or
anything else.
The identification must be in writing and can be given to anyone
"involved in the exchange." Generally, you give the identification to
the person or company holding your money.
The identification can be personally delivered, or it can be mailed or faxed,
as long as the mailing or faxing occurs during the 45 day period. Thus, putting
the identification in the mailbox on the 45th day will satisfy the requirement,
even if the recipient doesn't get it until the 47th day. But, be sure you can
prove when the identification was made! Use certified mail, return receipt
requested. If using a fax, have the recipient sign or initial the fax when they
get it and fax it back to you for your records.
The property you identify must be described unambiguously. While a complete
"legal description" is not necessary, and a street address may
suffice, you must be sure it is unambiguous.
Note that you do not need to identify your replacement property if you
acquire it during the 45 day identification period. Any property acquired in the
exchange with exchange funds during the 45 day identification period is deemed
to have been identified.
You may want to review our notes on How many
properties may I identify? and Can I change my
identification?
An attorney or accountant can assist you in making sure your identification
is done correctly. Get sound advice from a licensed professional!
Rice & Stallknecht, P.C. would be honored to
assist you.
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