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The 45 Day Identification Period
How the forty five day identification window works and how Albuquerque investors avoid missing it.
What This Includes
The forty five day identification period is one of the two fixed deadlines that govern every 1031 exchange. The clock starts the day after the relinquished property closes and runs for exactly forty five calendar days, including weekends and federal holidays. There is no extension for a slow closing, a holiday, or a change of plans, except in limited cases where the Internal Revenue Service issues disaster relief for a declared disaster area. For Albuquerque, NM investors selling commercial or investment property, the practical result is that replacement property research should begin well before the relinquished property closes, not after.
To satisfy the identification period, the investor must deliver a written identification to the Qualified Intermediary, the seller of the replacement property, or another party involved in the exchange who is not a disqualified person, such as the investor's own agent or attorney. Identification to a real estate broker or an attorney representing the investor does not count. The identification must describe the property unambiguously, typically by street address or legal description, and it must be signed by the investor.
Investors are not limited to one property. Under the Three Property Rule, up to three replacement properties may be identified regardless of their combined value. Under the Two Hundred Percent Rule, any number of properties may be identified as long as their combined fair market value does not exceed two hundred percent of the value of the relinquished property. Under the Ninety Five Percent Rule, any number of properties may be identified if the investor actually acquires at least ninety five percent of the aggregate value identified. We help Albuquerque, NM investors choose the identification strategy that matches their sourcing pipeline and risk tolerance, then confirm the identification is delivered correctly and on time.
Missing the forty five day window causes the exchange to fail entirely, and the relinquished property sale becomes a fully taxable event. Because the deadline is rigid, we recommend building a shortlist of qualifying properties before the relinquished property is even under contract, so the identification period is used to confirm and finalize rather than to search from a blank page.
What We Deliver
- Calculation of the exact forty five day deadline from the closing date
- Selection between the Three Property, Two Hundred Percent, and Ninety Five Percent identification rules
- Drafting of the written identification notice
- Confirmation that identification is delivered to a qualifying party
- Coordination with the Qualified Intermediary on identification logistics
- Tracking of any revisions made before the deadline
- Pre-identification shortlist development before the relinquished property closes
- Deadline reminders and calendar tracking through the identification period
Common Situations
FAQs about The 45 Day Identification Period
When does the forty five day period actually start?
For Albuquerque, NM investors, the forty five day identification period begins on the day after the relinquished property transfers to the buyer, not the day the exchange agreement is signed or the day the investor decides to exchange. The count includes every calendar day, and the deadline falls on the forty fifth day even if that day is a weekend or a federal holiday.
Can the forty five day deadline be extended?
In general, no. The deadline is fixed by statute and Treasury regulation and cannot be extended by agreement between the parties. The only common exception is a federally declared disaster that triggers Internal Revenue Service relief for exchanges affecting the disaster area. We help Albuquerque, NM investors plan around the deadline rather than rely on an extension.
How many properties can I identify?
Albuquerque, NM investors can identify up to three properties of any value under the Three Property Rule, or more properties under the Two Hundred Percent Rule or Ninety Five Percent Rule, depending on combined value and what is ultimately acquired. We help investors select the identification rule that fits their situation.
Who can I send my identification to?
The written identification must go to the Qualified Intermediary, the seller of the replacement property, or another party to the exchange who is not a disqualified person. Sending identification only to a personal real estate agent or attorney does not satisfy the requirement. We help Albuquerque, NM investors route identification correctly.
What happens if I identify a property and later change my mind?
An investor may revoke or revise an identification at any time before the forty five day period ends, as long as the revised identification is delivered to an appropriate party in writing before the deadline. After the forty five day period closes, the identified list is locked in. We help Albuquerque, NM investors track changes before the cutoff.
What if I cannot find a suitable property in forty five days?
If no replacement property is identified within the forty five day period, the exchange fails and the relinquished property sale becomes taxable. This is why we encourage Albuquerque, NM investors to begin replacement property research before the relinquished property closes, so the identification period is used to confirm choices already under review.
Compliance and Limits
Educational content only. Not tax, legal, or investment advice. The forty five day identification period is established under Internal Revenue Code Section 1031 and Treasury Regulation 1.1031(k)-1. New Mexico imposes a graduated state income tax on capital gains that are not deferred through a qualifying exchange. Consult with a Qualified Intermediary and a qualified tax advisor before making exchange decisions.
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