Inputs to organize
- Relinquished-property value
- Candidate properties
- Candidate values
- Ownership percentages
- Identification date
- Status and backup ranking
What the calculator shows
- Three-property rule check
- 200% rule check
- 95% rule warning
- Printable identification worksheet
How the worksheet moves from facts to an estimate
Count separately identified replacement properties for the three-property rule.
Aggregate stated fair market values and compare them with 200 percent of the relinquished-property value entered by the user.
If neither limit is satisfied, calculate the value actually acquired against the total value identified for a 95-percent-rule warning.
Preserve fractional interests and multiple relinquished properties explicitly.
Generate a printable worksheet without transmitting or certifying the identification.
Make the written identification recognizable
Replacement property must be designated in writing within the identification period and described clearly. A street address, legal description, or distinguishable property name may be appropriate depending on the asset. The document must be signed and delivered to a permitted person involved in the exchange, not left in the owner's private file.
Confirm the exact identification protocol with the qualified intermediary. Entity interests, fractional interests, construction projects, and property not yet assigned a final address may require additional detail.
Use the three-property rule when the list is focused
The three-property rule generally allows identification of up to three replacement properties without regard to their aggregate fair market value. It is often the simplest framework when the owner has a clear primary candidate and credible backups. Every named property should still have a realistic diligence, financing, and closing path.
Do not list weak properties merely to fill three slots. A backup that cannot close inside the exchange period provides little protection.
Measure the 200% rule with defensible values
When more than three properties are identified, the aggregate fair market value may be limited to 200% of the relinquished property's value. Use values that can be supported as of the relevant identification date. Asking prices, allocations, fractional interests, and development plans may require professional judgment.
The organizer compares the entered totals, but it cannot validate an appraisal or determine what property interest was actually identified. Keep the supporting valuation notes with the identification file.
Treat the 95% exception as a demanding fallback
If the three-property and 200% rules are not satisfied, the 95% exception generally requires acquisition of at least 95% of the aggregate value identified. That is a high closing threshold. A single failed acquisition can cause the complete list to miss the exception.
Calculate the percentage with current values and closing expectations before relying on this route. The safer planning choice may be to narrow or revise the list while the 45-day period remains open.
Revise the list only while the window remains open
A written identification can generally be changed or revoked within the identification period using the required delivery process. After the period closes, the owner cannot simply substitute a more attractive property. Track every version, signature, delivery time, and recipient.
Coordinate revisions with contract negotiations and lender work. Removing a backup before a replacement contract is dependable can leave the exchange without a closeable alternative.
Connect identification with due diligence
Identification is not a reservation and does not replace inspection, title, environmental, lease, financial, insurance, zoning, sponsor, or lender review. Rank candidates by closing certainty as well as economics. Record the next diligence milestone and the person responsible for it.
Bring the relinquished value, candidate count, candidate values, ownership interests, and expected acquisitions to the calculation review. The organizer can test the entered safe-harbor numbers, while the qualified intermediary and counsel confirm the written notice and transaction facts.
A transparent estimate is stronger than a confident guess.
Keep the source for every input beside the calculation. Use the current contract, draft settlement statement, payoff, basis records, depreciation schedule, replacement-property facts, lender terms, and qualified-intermediary information. Mark incomplete numbers as estimates and update them when documents change. A calculator cannot see title, taxpayer identity, property use, related parties, funds flow, mixed use, asset character, disaster relief, or a closing instruction that changes the result.
Run a conservative scenario as well as the expected case. Lower sale proceeds, higher expenses, a different debt payoff, or a delayed replacement closing can expose a weak point before it becomes irreversible. Save the date and assumptions with the output. If the result changes materially from one reasonable scenario to another, move that fact to the top of the CPA, attorney, qualified intermediary, lender, broker, or licensed securities professional review.
The initial calculation review is free and can begin before listing, while under contract, during the identification period, or while comparing replacement options. The objective is to organize a clear exchange brief and route regulated work to the appropriate professional. The worksheet remains educational and should not be copied into a filed return or closing instruction without transaction-specific review.
Create a file another professional can audit.
Begin the handoff with the taxpayer name, relinquished property, qualifying use, anticipated closing date, exchange status, and the decision the calculation is meant to support. Separate facts already supported by a document from assumptions that still need confirmation. A one-page summary should tell a CPA, attorney, qualified intermediary, lender, broker, or licensed securities professional what is happening without forcing that person to reconstruct the transaction from scattered emails.
Label the source and date for every important number. Contract price, selling expenses, original cost, capital improvements, depreciation, debt payoff, exchange expenses, replacement price, new financing, and cash outside the exchange can change at different points. Keep the earlier worksheet instead of overwriting it. A visible version history makes it easier to explain why projected gain, boot, required equity, or estimated tax changed between listing, contract, identification, and closing.
Maintain a short decision log beside the numbers. Record open title questions, taxpayer-identity issues, related-party facts, mixed personal and investment use, lender constraints, identification choices, backup properties, and unresolved tax-character questions. Assign each issue to the professional responsible for answering it and include a due date tied to the actual transaction calendar. That turns the calculator from an isolated estimate into a working exchange checklist.
Before closing, reconcile the latest worksheet to the draft settlement statement, loan documents, qualified-intermediary instructions, title vesting, and replacement-property contract. After closing, preserve the final calculation, signed agreements, identification notice, settlement statements, depreciation records, and professional advice with the tax file. Organized support does not guarantee exchange treatment, but it reduces avoidable confusion when the return is prepared or the transaction is later reviewed.
Checks before relying on the output
- Require a property description specific enough for adviser review.
- Require a stated value and ownership percentage for every candidate.
- Warn when changes are entered after the identification deadline.
- Do not mark the exchange compliant merely because a numeric rule appears satisfied.
The organizer does not submit or validate a legal identification notice and must preserve exact candidate descriptions for advisor review.
Common questions
Can more than three properties be identified?
Potentially, but another identification rule must be satisfied. The organizer should show the applicable numeric test rather than assume every list over three fails.
Does entering a property here identify it legally?
No. The identification must be made in the required manner to an appropriate party. The organizer only prepares and checks information.
What value is used for the 200-percent test?
The worksheet compares entered fair market values with the entered relinquished-property value. Those values should be reviewed when the result is close.
What is the 95-percent warning?
It indicates that the user may be relying on acquiring at least 95 percent of the aggregate value identified, a demanding fallback that requires precise closing data.
Can a DST interest be one candidate?
A qualifying interest may be identified, but the exact trust interest, offering availability, investor eligibility, and closing process still require review.
