The Regulations provide that, in the case of a deferred exchange, any Replacement Property received by the Taxpayer will be treated as property which is not of like-kind to the Relinquished Property if:

• A: The Replacement Property is not "identified" before the end of the "Identification Period", or
• B: The identified Replacement Property is not received before the end of the "exchange period".

The Identification Period begins on the date the Taxpayer transfers the Relinquished Property and ends 45 days thereafter.

Three Property or 200 Percent Rule

The Taxpayer may identify more than one property as Replacement Property. However, regardless of the number of relinquished properties transferred by the Taxpayer as part of the same deferred exchange, the maximum number of replacement properties that the Taxpayer may identify is:

• A: Three properties of any fair market value, or
• B: Any number of properties as long as their aggregate fair market value as of the end of the Identification Period does not exceed 200 percent of the aggregate fair market value of all the relinquished properties.

With certain exceptions, if, as of the end of the Identification Period, the Taxpayer has identified more properties as replacement properties than is permitted, the Taxpayer is treated as if no Replacement Property had been identified.

Exceptions to Three Property or 200 Percent Rule

Any Replacement Property received by the Taxpayer before the end of the Identification Period does not have to be formally identified as Replacement Property, but is included in the three property / 200 percent rule calculation.

If the Taxpayer exceeds the three property and 200 percent rule, Replacement Property identified within 45 days and received within the Exchange Period will qualify as like-kind property if the Taxpayer received at least 95 percent of the aggregate FMV of ALL identified properties.

Revocation of Identification

A Replacement Property identification may be revoked at any time prior to the end of the Identification Period. The revocation must be made in a written document that is signed by the Taxpayer and must be hand delivered, sent by certified mail, or faxed before the end of the Identification Period to the person or entity to whom the identification was sent.

Receipt Requirements

The Taxpayer must acquire Replacement Property prior to the end of the Exchange Period. The exchange period begins on the date the Taxpayer transfers the Relinquished Property and ends on the earlier of 180 days thereafter or the due date (including extensions) of the Taxpayer's tax return for the taxable year in which the transfer of the Relinquished Property occurs. Because the timing requirements relating to the identification and exchange periods are statutory, requests for extensions of the identification and exchange periods will not be granted.