95 Percent Identification Rule
Identification compliance using 95 percent of identified property value test
The 95 percent identification rule allows investors to identify any number of replacement properties if they acquire at least 95 percent of the total identified value. This rule provides flexibility for investors in Columbus, OH who want to cast a wide net when searching for replacement properties. We help investors understand this rule, calculate identified values, and ensure compliance with the 45-day identification deadline. Our coordination with Qualified Intermediaries and qualified escrow providers ensures all identified properties meet IRS requirements. We track both the 45-day identification period and the 180-day closing deadline to help investors complete successful exchanges.
What's Included
- Identification rule evaluation and selection guidance
- Fair market value calculation and verification
- Identification letter preparation for multiple properties
- 95 percent threshold tracking and monitoring
- Qualified Intermediary coordination
- Deadline tracking for 45-day identification and 180-day closing
- Compliance verification and documentation
Common Situations
Investor in Columbus, OH wants to identify ten properties but only needs to acquire 95 percent of total value
Portfolio owner seeks flexibility to identify multiple replacement properties across different markets
Developer needs to identify several properties while maintaining acquisition flexibility
Frequently Asked Questions
How does the 95 percent identification rule work in Columbus, OH?
The 95 percent identification rule in Columbus, OH allows investors to identify any number of replacement properties if they acquire at least 95 percent of the total fair market value of all identified properties. This rule provides flexibility when the three-property rule or 200 percent rule doesn't meet your needs. We help calculate the identified values and ensure compliance with this identification method.
What happens if I don't acquire 95 percent of identified value in Columbus, OH?
If you don't acquire at least 95 percent of the identified value in Columbus, OH, the exchange may fail, and you could be subject to capital gains tax on the entire transaction. We help structure identification strategies to ensure you meet the 95 percent threshold and coordinate with Qualified Intermediaries to track acquisition progress.
How do I calculate boot under the 95 percent identification rule in Columbus, OH?
Boot under the 95 percent identification rule in Columbus, OH is calculated as the difference between the value of properties acquired and the value of properties identified, if less than 95 percent is acquired. We help analyze potential boot exposure and structure exchanges to minimize taxable boot while maintaining compliance with IRS regulations.
Can I combine the 95 percent rule with other identification rules in Columbus, OH?
No, investors in Columbus, OH must choose one identification rule and apply it consistently. You cannot mix the 95 percent rule with the three-property rule or 200 percent rule. We help evaluate which identification rule best fits your situation and ensure consistent application throughout the exchange process.
What documentation is needed for the 95 percent identification rule in Columbus, OH?
Documentation for the 95 percent identification rule in Columbus, OH must include identification letters listing all properties, fair market value appraisals or purchase agreements for each identified property, and tracking of acquired properties to verify the 95 percent threshold is met. We provide identification letter preparation and value verification services.
Example Engagement
Example of the type of engagement we can handle
Client Situation:
Investor selling a commercial property in Columbus, OH wants to identify eight replacement properties but only plans to acquire some of them
Our Approach:
We evaluated the 95 percent rule as the appropriate identification method, calculated fair market values for all identified properties, prepared identification letters, and established tracking to ensure the 95 percent threshold would be met
Expected Outcome:
Client identified eight properties with total value of $5 million, acquired $4.8 million worth of properties meeting the 95 percent threshold, with all documentation completed within the 45-day deadline
Educational content only. Not tax, legal, or investment advice. Not tax, legal, or investment advice. Consult a qualified intermediary and tax advisor before making decisions.
Ready to Start Your 1031 Exchange?
Get expert guidance for your exchange. Contact us today to discuss your situation.