REPLACEMENT PROPERTY IDENTIFICATION LETTER
Exchanger: ___________________________________________________________________________________
Relinquished
Property: _____________________________________________________________________________
In
accordance with the provisions of I.R.C. Section 1031, the Replacement Property
must be identified in writing on or before midnight of the 45th day from the
date the Relinquished Property is transferred. Please refer to Sections III.A. and
III.B. of our Exchange Agreement for this transaction, which summarize the
I.R.S. Requirements for identification of Replacement Property.
Identified Replacement Property must be ÒunambiguouslyÓ
identified by the exchanger by street address, legal description or Òdistinguishable
nameÓ. (Note: In the event that the Replacement Property consists of improved
real property where the improvements are to be produced during the exchange
period, then, in addition to the street address, legal description, or
Òdistinguishable nameÓ, the identification must include as much detail
regarding the construction of the improvements as is practicable at the time
the identification is made.)
As of June 10, 1991,
rules and regulations became effective which dramatically impacted the number
of properties that can be identified as potential replacement properties. The rules are as follows:
1. Three
(3)-Property Rule: A maximum
of three properties may be identified without regard to the fair market value
of the properties.
or
2. Two
Hundred Percent (200%) Rule: Any number of properties may be identified, so long as the
aggregate fair market value of the properties identified does not exceed 200%
of the aggregate fair market value of the Relinquished Property.
or
3. Ninety
Five Percent (95%) Rule: The exchanger may identify any number of properties without
regard to the aggregate fair market value, so long as exchanger receives ninety
five percent (95%) of the aggregate fair market value of all identified
Replacement Properties prior to the end of the one hundred and eighty (180) day
period.
I
hereby identify the following as potential Replacement Property(ies). (The identification must be exact,
therefore, please use the complete property address or
the tax assessor's number, which must include the county and state.)
1. $ (value
for the 200/95% rules)
2. $ (value
for the 200/95% rules)
3. $ (value
for the 200/95% rules)
(If more than 3 properties are to be identified,
please add to the back of this form.)
It is solely the
exchangerÕs responsibility to conform to the rules and regulations regarding
the 45-day identification period and 180-day exchange completion period. You must acquire ownership of all
replacement properties you intend to purchase, within a maximum of 180 days
after the close of the sale of the first Relinquished property you sold as part
of this exchange. Also, please
refer to Section II.B of our Exchange Agreement stating the restrictions
regarding your rights to obtain the benefits of the exchange proceeds once you
identify property.
By: _______________________________________________________ Dated: _______________________
By: _______________________________________________________ Dated: _______________________