The 45-Day Identification Period Explained
The 45-day identification period is one of the most critical deadlines in a 1031 exchange. Starting from the day you close on your relinquished property, you have exactly 45 calendar days to formally identify potential replacement properties to your Qualified Intermediary.
Why This Deadline Matters for NYC Investors
New York's competitive real estate market makes the 45-day window particularly challenging. Properties move quickly, and investors must be prepared to identify suitable replacements well before the deadline.
Identification Rules You Must Follow
- Three Property Rule: Identify up to three replacement properties of any value without restrictions
- 200 Percent Rule: Identify any number of properties as long as their combined value doesn't exceed 200% of the relinquished property value
- 95 Percent Rule: Identify any number of properties if you acquire at least 95% of their total identified value
Best Practices for NYC Investors
Start your property search before selling. Our team recommends identifying potential replacements 30-60 days before your relinquished property closes. This gives you time to conduct due diligence and have backup options ready.
Common Mistakes to Avoid
- Waiting until the last week to identify properties
- Not properly documenting the identification in writing
- Failing to account for NYC-specific closing timelines
- Overlooking the impact of NYC transfer taxes on exchange calculations