What This Includes

Our 200 Percent Rule Strategy service helps investors use the 200-percent identification rule to identify multiple replacement properties while staying within value limits. This service is designed for property owners who want to identify more than three properties but need to stay within the 200% of relinquished property value limit.

We coordinate with Qualified Intermediaries and qualified escrow companies to ensure your identification letter properly lists properties and their values, and complies with the 200-percent rule requirements. The 200-percent rule allows you to identify any number of replacement properties as long as their total fair market value doesn't exceed 200% of the relinquished property's value. This rule provides flexibility for Albuquerque, NM investors who want multiple options while maintaining value discipline.

Our strategic process includes property valuation, total value calculation, identification letter drafting with proper value documentation, and coordination throughout the 45-day and 180-day deadlines. We help you understand when the 200-percent rule is preferable to the three-property rule, and ensure your identification strategy maximizes options while meeting IRS requirements.

FAQs about 200 Percent Rule Strategy

What is the 200-percent rule?

The 200-percent rule allows Albuquerque, NM investors to identify any number of replacement properties as long as their total fair market value doesn't exceed 200% of the relinquished property's value. This rule provides flexibility for Albuquerque, NM investors who want multiple property options while maintaining value limits. We help Albuquerque, NM investors understand this rule and calculate whether their property options qualify.

How do I calculate if my properties qualify under the 200-percent rule?

Albuquerque, NM investors calculate the 200-percent rule by adding the fair market values of all identified replacement properties and ensuring the total doesn't exceed 200% of the relinquished property's sale price. For example, if you sold a property for $1 million, you can identify properties totaling up to $2 million. We help Albuquerque, NM investors perform these calculations and ensure compliance in their identification letters.

What identification rules apply if I exceed the 200-percent limit?

If Albuquerque, NM investors identify properties exceeding 200% of the relinquished property value, they must qualify for the 95-percent exception by acquiring at least 95% of the total value of all identified properties. Otherwise, the identification fails. We help Albuquerque, NM investors avoid this situation by properly calculating values and staying within limits, or understanding the 95-percent exception requirements.

What happens if I receive boot when acquiring properties identified under the 200-percent rule?

If Albuquerque, NM investors receive boot (cash or non-like-kind property) when acquiring replacement properties, that boot amount is taxable. Boot can occur from property value differences, debt relief exceeding new debt, or cash received. We help Albuquerque, NM investors structure acquisitions to minimize boot and coordinate with tax advisors to understand the tax implications of their exchange.

Can I identify properties under both the three-property rule and 200-percent rule?

No, Albuquerque, NM investors must choose one identification rule and apply it consistently. You cannot mix the three-property rule with the 200-percent rule in the same identification letter. We help Albuquerque, NM investors evaluate their options and choose the rule that best fits their situation and property goals.

200 Percent Rule Strategy