How to Write a 1031 Identification Letter (Template + Tips)
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Key Takeaways
A 1031 identification letter is a written document stating which properties you're buying with your exchange proceeds. It must be delivered to your qualified intermediary within 45 days of your sale closing. The letter must include sufficient property description (address is best) and comply with the 3-property rule, 200% rule, or 95% rule.
Template: 3-Property Rule identification letter
Use this template as a starting point. Adapt the bracketed fields to your transaction.
[Date]
To: [QI firm name] [QI address]
Re: Section 1031 Like-Kind Exchange — Replacement Property Identification
Dear [QI contact name]:
This letter identifies replacement property for my Section 1031 like-kind exchange of the property located at [relinquished property address / legal description]. The sale of this property closed on [closing date].
Under the 3-Property Rule (Treasury Regulation 1.1031(k)-1(c)(4)(i)), I identify the following replacement properties:
-
[Street address], [City], [State], [ZIP] Legal description: [if available] Anticipated fair market value: $[amount]
-
[Street address], [City], [State], [ZIP] Legal description: [if available] Anticipated fair market value: $[amount]
-
[Street address], [City], [State], [ZIP] Legal description: [if available] Anticipated fair market value: $[amount]
I intend to acquire one or more of these properties as replacement property within the 180-day exchange period.
Respectfully,
[Signature] [Printed name] [Address] [Phone] [Email]
Template: 200% Rule identification letter
Use this version when identifying more than three properties. The combined fair market value of all identified properties must not exceed 200% of the relinquished property's sale price.
[Date]
To: [QI firm name] [QI address]
Re: Section 1031 Like-Kind Exchange — Replacement Property Identification
Dear [QI contact name]:
This letter identifies replacement property for my Section 1031 like-kind exchange of the property located at [relinquished property address / legal description]. The sale of this property closed on [closing date] for a sale price of $[amount].
Under the 200% Rule (Treasury Regulation 1.1031(k)-1(c)(4)(ii)), I identify the following replacement properties, the aggregate fair market value of which does not exceed 200% of the relinquished property sale price:
- [Address / legal description] — Anticipated FMV: $[amount]
- [Address / legal description] — Anticipated FMV: $[amount]
- [Address / legal description] — Anticipated FMV: $[amount]
- [Address / legal description] — Anticipated FMV: $[amount]
Total identified value: $[total] 200% of relinquished property sale price: $[200% amount]
I intend to acquire replacement property within the 180-day exchange period.
Respectfully,
[Signature] [Printed name] [Address] [Phone] [Email]
What makes an identification letter valid
| Requirement | Details |
|---|---|
| In writing | Must be a written document, not a phone call, text message, or verbal conversation |
| Signed | Your signature (or the authorized signer for an entity) |
| Delivered to the QI before midnight on Day 45 | The 45-day clock starts on the day the relinquished property sale closes (Day 0). Day 45 is absolute — no extensions |
| Property described with sufficient specificity | The description must be clear enough that a reader can identify exactly which property you mean. Street address is the standard. Legal description adds certainty. Both together are best |
| Identification rule satisfied | 3-Property Rule: up to 3 properties of any value. 200% Rule: any number of properties with combined FMV not exceeding 200% of the relinquished sale price. 95% Rule: any number at any value, but you must close on at least 95% of total identified value |
Property descriptions: what works and what does not
Strong descriptions:
- "456 Oak Street, Austin, TX 78701, Lot 5, Block 12, Barton Heights Addition, Travis County"
- "The commercial office building at 789 Market Street, San Francisco, CA 94103, known as the Acme Building"
Weak descriptions (may be challenged):
- "The apartment building in Denver worth about $500,000"
- "The DST investment vehicle in the Southwest region"
- "The commercial property my broker told me about"
Use the street address at minimum. Add the legal description if available. Either alone may work, but both together remove all ambiguity.
Delivery methods
| Method | Valid? | Best practice |
|---|---|---|
| Email with read receipt or written confirmation from QI | Yes | Keep the confirmation email; CC yourself |
| Hand delivery with signed receipt | Yes | Get a dated, signed acknowledgment |
| Overnight courier (FedEx, UPS) with tracking | Yes | Retain the tracking confirmation |
| Certified mail with return receipt | Yes | Retain the return receipt |
| Text message | No | Not a reliable written record |
| Phone call | No | Not in writing |
If you want extra protection, send by email with confirmation and by overnight courier. Two documented delivery methods eliminate any question about timing.
Revocation rules
Before Day 45: You can revoke a prior identification and submit a new one. The revocation must also be in writing and delivered to your QI. This is uncommon and should be avoided if possible — get it right the first time.
After Day 45: The identification is locked. You cannot add, remove, or substitute properties. You can choose not to close on an identified property, but you cannot change the list.
Checklist before sending
- Letter is dated
- Your name (or entity name) appears as the exchanger
- Relinquished property is described with address and closing date
- Each replacement property includes a street address (and legal description if available)
- Anticipated fair market value is listed for each property
- The identification rule you are using is stated
- You have signed the letter
- You have a plan for documented delivery (email confirmation, courier tracking, or both)
- Delivery will occur before midnight on Day 45
Record-keeping after delivery
Keep permanent copies of:
- The identification letter as sent
- Proof of delivery (email confirmation, courier receipt, return receipt)
- QI written acknowledgment of receipt
- The dates: Day 0 (sale close), Day 45 (identification deadline), Day 180 (exchange deadline)
These documents are your primary evidence of 45-day compliance if the exchange is ever audited.
Need help drafting your identification? Your qualified intermediary or a 1031 advisor can prepare the letter. Understanding what goes into it helps you catch errors and confirm everything is correct before delivery.
The Bottom Line
Proper documentation is critical. Write your identification letter clearly, describe properties unambiguously, follow the applicable rule, get a delivery confirmation, and keep a copy for your records. This letter is your evidence of compliance if the IRS ever questions your exchange.
Frequently Asked Questions
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