IRS Regulations require that the taxpayer send an identification letter listing their potential replacement properties within 45 days of the sale of the relinquished property.  The letter must be signed by the taxpayer or their legal agent. Most commonly, the exchanger will scan and email or fax the signed ID letter to the Qualified Intermediary (QI).  Others follow up by sending the original hard copy by certified mail.  If it is sent by fax, the taxpayer should request an acknowledgement back from QI indicating when the letter was received.  If sent by email, the taxpayer should print out a dated copy for their tax file.

Property identified must be described in a such a way that it cannot be confused with other property; therefore, the use of a complete address (street number, city, state, zip code) should be sufficient.  Unplatted or rural tracts of land can be more challenging.  A copy of a plat or survey may be necessary.  When using the 200% rule, it is advisable to not only list the complete address but also the asking price. If the replacement property does not currently exist because it is being built then the taxpayer should write a 2-3 sentence description of what is being built.  It should include approximate square footage, exterior materials, number of stories, how it might be used (example: carwash).

The identification letter must be received by the Qualified Intermediary within 45 days of the sale of the relinquished property. There are no exceptions to the 45-day identification deadline except for an exchanger considered to be an “affected party” for a Federally-declared Disaster Area.