Three replacement properties

[Anthony Freeman]

Have you ever identified more than three replacement properties in a 1031 tax exchange?

[Dave Foster]

@Anthony Freeman, it's done quite frequently.  Usually in one of these circumstances.

1. When selling a larger asset and wanting to purchase several smaller assets.  The exchanger can name more than three replacements but the total value of the list will still be less than 200% of the net sale's price of the old property.

2. they are already under contract for their replacements so that they close on all of their replacements during the 45 day identification period.  Even though their list may breat the 200% rule they will close on all of their replacements during the 45 day period.  So they were able to purchase at least 95% of the value of their list.

Be very cautious about identifying more than 4 properties if their value is more than 200% of what you sold if you can't close on all of your properties during the 45 day period.  It only takes one property that you end up having to put on your iist but not close that will kill your exchange.