How to Write a 1031 Identification Letter (Template + Tips)

What Is a 1031 Identification Letter?

A 1031 identification letter is a written document stating which replacement property (or properties) you plan to buy with your 1031 exchange proceeds.

That's it. Simple concept.

But it's critical. This letter is your official record that you identified property within the 45-day window. If the IRS ever audits your exchange, this letter is your evidence that you complied with the rules.

The letter serves a few purposes:

1. It documents your intent to do a 1031 exchange.
2. It specifies which properties you're buying.
3. It locks in your identification (you can't change it after Day 45).
4. It creates a paper trail for tax compliance.

Most investors don't write their own letters. Their tax advisor, real estate attorney, or qualified intermediary writes it. But you should understand what goes into it and why it matters.

What the Letter Must Contain

The IRS regulations are surprisingly minimalist about what the identification letter must include. Here's what's required:

1. Identification of the exchanger (you): Your name and address. Doesn't need to be fancy. Just clear identification of who's doing the exchange.

2. Identification of the relinquished property (what you sold): A brief description of the property you sold. Example: "The commercial building located at 123 Main Street, Denver, Colorado 80202."

3. Identification of the replacement property (what you're buying): A description of the replacement property sufficient to identify it. This is the key requirement. The property description must be clear enough that someone reading the letter would know exactly which property you're talking about.

The regulations say the identification must be made "in writing" and must describe the property "in sufficient detail to identify it." Street address is ideal. Legal description works too. A combination is best.

4. Date of the letter.

5. Your signature.

That's the baseline. But good practice adds a few more elements.

Best Practice Elements

Beyond the minimum requirements, professional identification letters typically include:

- Statement of exchange intent: "This letter serves to identify replacement property for a Section 1031 like-kind exchange."

- Date of the sale/relinquished property closing: So the 45-day clock is clear.

- Identification of the qualified intermediary: The name and contact info of the QI handling the exchange.

- Which identification rule is being used: "These properties are identified under the 3-property rule" or "under the 200% rule."

- Confirmation of delivery: A note that this letter is being delivered to the QI within the 45-day window.

These additions create a more complete record and reduce ambiguity.

Sample Language for the 3-Property Rule

Here's template language you can adapt:

"[Date]

To: [QI Name and Address]

Re: Section 1031 Like-Kind Exchange Identification

Dear [QI Name]:

This letter identifies replacement property for the above-referenced 1031 like-kind exchange of the property located at [your sold property address/legal description]. The sale of this property closed on [date].

Under the 3-property identification rule, I identify the following replacement properties:

1. [Street Address], [City], [State], [ZIP]. Legal description: [if available]. Anticipated purchase price: $[amount].

2. [Street Address], [City], [State], [ZIP]. Legal description: [if available]. Anticipated purchase price: $[amount].

3. [Street Address], [City], [State], [ZIP]. Legal description: [if available]. Anticipated purchase price: $[amount].

I intend to acquire these properties as part of my Section 1031 exchange within the 180-day period following the sale of the relinquished property.

Respectfully,

[Your signature] [Your printed name] [Your address] [Your phone] [Your email]"

This is straightforward and covers the essentials. You're identifying exactly 3 properties, which is allowed under the 3-property rule without any value limits.

Sample Language for the 200% Rule

If you're identifying more than 3 properties:

"[Date]

To: [QI Name and Address]

Re: Section 1031 Like-Kind Exchange Identification

Dear [QI Name]:

This letter identifies replacement property for the above-referenced 1031 like-kind exchange of the property located at [your sold property address/legal description]. The sale of this property closed on [date] for a purchase price of $[amount].

Under the 200% rule of Treasury Regulation 1.1031(k)-1(c)(4)(ii), I identify the following replacement properties, the aggregate fair market value of which does not exceed 200% of the value of the relinquished property:

1. [Address/Legal Description], Anticipated Price: $[amount]
2. [Address/Legal Description], Anticipated Price: $[amount]
3. [Address/Legal Description], Anticipated Price: $[amount]
4. [Address/Legal Description], Anticipated Price: $[amount]

Total identified: $[total value] 200% of relinquished property value: $[200% of sale price]

I intend to acquire property with a fair market value of at least equal to the relinquished property within the 180-day period.

Respectfully,

[Your signature] [Your printed name] [Your address] [Your phone] [Your email]"

The 200% rule requires that you show: total identified value doesn't exceed 200% of your sale price. The math in the letter proves it. This is good protection if you're ever questioned.

Sample Language for the 95% Rule

If you're over-identifying and relying on the 95% rule to close on properties that total 95%+ of your sale price:

"[Date]

To: [QI Name and Address]

Re: Section 1031 Like-Kind Exchange Identification

Dear [QI Name]:

This letter identifies replacement property for the above-referenced 1031 like-kind exchange of the property located at [your sold property address/legal description]. The sale of this property closed on [date] for a purchase price of $[amount].

Under the 95% rule of Treasury Regulation 1.1031(k)-1(c)(4)(iii), I identify the following replacement properties:

[List all properties with addresses and values]

I intend to acquire property with a fair market value of at least 95% of the relinquished property ($[95% amount]) within the 180-day exchange period.

Respectfully,

[Your signature]"

The 95% rule is riskier (you must eventually close on 95%+ of value), but it gives you maximum flexibility in identifying many properties. Show your math in the letter so it's clear you understand the requirement.

Property Description: Getting It Right

Here's where many identification letters fail: property description.

The IRS says the property must be described "in sufficient detail to identify it." This means someone reading your letter should know exactly which property you're talking about.

Good descriptions: "The multifamily property located at 456 Oak Street, Austin, Texas 78701, being the property legally described as Lot 5, Block 12, Barton Heights Addition, Travis County, Texas, as recorded in Volume 345, Page 678 of the Travis County Deed Records."

"The commercial office building at 789 Market Street, San Francisco, California 94103, known as the Acme Building, currently leased to Acme Corp."

Risky descriptions: "The apartment building in Denver worth about $500,000"

"The commercial property my broker told me about"

"The DST investment vehicle in the Southwest region"

These are too vague. If IRS agents read them, they wouldn't know exactly which property you meant.

The best rule of thumb: use the street address and the legal description if available. Either one alone might work, but both together are bulletproof.

Delivery: How to Send Your Letter

Once you've written your identification letter, you need to deliver it to your QI within 45 days of your sale closing.

Valid delivery methods:

1. Email with read receipt or confirmation from QI that they received it
2. Hand delivery with a signed receipt
3. Overnight courier (FedEx, UPS) with tracking number
4. Certified mail with return receipt

Invalid delivery methods:

1. Text message (even if read)
2. Phone call (not documented)
3. Social media message
4. Leaving it on someone's desk without confirmation

You need documented proof that your QI received the letter on a specific date. If you ever have to defend your exchange, you need to show: "I delivered this letter on [date]."

Best practice: Email it to your QI with a read receipt request. Keep the confirmation email. Also CC yourself so you have a copy in your own email. This creates a clear record.

If you're being extra cautious, also send a signed copy via overnight courier, just so there's no question.

Can You Change or Revoke Your Identification?

Before Day 45: Yes, you can revoke your identification completely. This means you're un-identifying the properties you listed and starting over. You can re-identify different properties as long as you do it before Day 45. But this is rare and messy. Better to get it right the first time.

After Day 45: No, you cannot change or revoke your identification. It's locked in. You must close on one (or more) of the properties you identified. If you change your mind about a property, you can't un-identify it. You can choose not to close on it (and close on a different one that you identified), but you can't change the list.

This is why careful, thorough identification is important. Once Day 45 passes, you're committed.

Documentation and Record-Keeping

After you've sent your identification letter, keep detailed records:

1. A copy of the letter you sent
2. Proof of delivery (email confirmation, courier receipt, return receipt)
3. The date you delivered it
4. Confirmation from your QI that they received it

If the IRS ever audits your exchange, your identification letter and proof of timely delivery are your best defense. They prove you complied with the 45-day rule.

Also keep copies of:

• Your QI engagement agreement
• Closing statement from your sale
• Proof that all sale proceeds went to your QI
• Purchase agreements for your replacement properties
• Closing statements for your replacement property purchases

This creates a complete audit trail. If you're ever questioned, you can show the IRS exactly what you did and when.

Real Example: Identification Letter

Let's walk through a real scenario to see how this works.

You sell a commercial building on January 15. It closes on January 31.

Your 45-day identification window is January 31 to March 16.

By March 10, you've decided to buy two properties:

• A multifamily complex for $400,000
• An office building for $300,000

You sit down and write your identification letter:

---

March 10, 2026

To: First Rate Qualified Intermediary 123 Exchange Lane New York, NY 10001

Re: Section 1031 Exchange Identification

Dear First Rate QI:

This letter identifies replacement property for my Section 1031 like-kind exchange.

Relinquished Property: Commercial office building located at 999 Commerce Drive, Chicago, Illinois 60601. This property closed on January 31, 2026. Fair market value: $700,000.

Replacement Properties (identified under the 3-property rule):

1. Multifamily residential property located at 555 Residential Avenue, Austin, Texas 78741. Legal description: Lot 3, Block 8, Westlake Addition, Travis County, Texas. Anticipated fair market value: $400,000.

2. Office building located at 777 Business Boulevard, Denver, Colorado 80202. Legal description: Suite 100-200, Denver Business Center, Denver County, Colorado. Anticipated fair market value: $300,000.

I intend to acquire these properties as replacement property in my Section 1031 exchange within the 180-day exchange period.

This identification is being delivered to you within the 45-day identification period.

Respectfully,

[Signature] Jane Smith 456 Oak Terrace Chicago, IL 60611 (312) 555-0100 jane@email.com

---

You then email this letter to your QI with a read receipt request on March 10. You receive a confirmation email from the QI that they received it. You're good. You've met the identification requirement.

By June 29 (Day 180), you need to close on both properties. Or you could close on just the multifamily complex ($400,000) and designate the office building as failed. Or other combinations. As long as you've closed on at least $700,000 (your sale price) of replacement property, you're in compliance.

The Bottom Line

The identification letter is simple in concept but powerful in practice. It documents your compliance with the 45-day identification rule and locks in which properties you've committed to buying.

Write it clearly. Describe properties unambiguously. Deliver it to your QI with documented proof. Keep a copy for your records. This single document is your best defense if your exchange is ever questioned.

Most investors have their tax advisor or attorney draft the letter, and that's smart. But understanding what goes into it helps you catch errors and ensure everything is correct.

Need help with your identification? Connect with a qualified advisor who can draft your letter correctly. Or if you want to understand the rules better, check out our complete guide to identification rules.