1031 Identification Rules Checker

You may identify up to three properties, regardless of value. It is the simplest rule and the one most exchanges use. Each property within a DST counts toward the three-property limit. If a DST owns four properties, for example, it already exceeds the limit and the 200% rule is generally used instead.

You may identify any number of properties as long as their combined value does not exceed 200% of the value of the property you sold. Unlike the 3-property rule, there is no limit on the number of properties you can identify — only their combined value. For DST investors, this rule can provide flexibility to identify several replacement properties while staying within the 200% limit. For example, if you sold for $1,000,000 you may identify up to $2,000,000 in total — four DSTs at $500,000 each, or five at $400,000.

If your list breaks both rules above, it can still qualify if you actually close on at least 95% of the total value you identified. In practice, that means buying nearly everything on the list, so it is a fallback for a list that got too long, not a plan. If the checker shows this rule, trim the list before day 45.

Identify the real estate held by the DST. Your signed written identification, sent to your qualified intermediary by day 45, should list each property by street address or legal description. The addresses are in the offering documents, and NexTrend usually provides them for you. Identifying only the DST by name may not be enough.