Three-property rule
A 1031 identification rule letting the taxpayer identify up to three replacement properties, regardless of value. The most-used of the three identification rules.
Get the steps of a home sale by email, in order, one short email at a time.
Eight short emails, free. Unsubscribe any time. What's in them
Part 1 of 4
Why a seller cares
In a 1031 exchange you can name up to three replacement properties, whatever their value, inside the 45-day window. It is the rule most exchangers use, and naming a fourth switches you to a different rule.
Part 2 of 4
A simple example
You sell a rental and identify three replacement buildings in writing on day 40. You close on one of them on day 120.
| What you identify | Which rule applies |
|---|---|
| Up to three properties, any value | The three-property rule |
| Four or more, totaling under 200% of the sale | The 200% rule |
| Four or more over 200% | The 95% rule, which almost nobody uses |
Three names, in writing, by day 45. The rule is simple and the deadline is not flexible.
Part 3 of 4
What people get wrong
That you have to buy all three. Identification is a list of candidates; closing on one is enough.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines three-property rule in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.