How do I properly identify replacement property, and is an email to my agent enough?

The identification is a document you sign that names each property so precisely nobody could confuse it

Replacement property is identified only if it is 'designated as replacement property in a written document signed by the taxpayer' (Reg. §1.1031(k)-1(c)(2)). The Federation of Exchange Accommodators adds the obvious corollary: 'The identification cannot be made orally.'

Each property must be 'unambiguously described', which for real estate means a legal description, a street address or a distinguishable name such as 'the Mayfair Apartment Building' (Reg. §1.1031(k)-1(c)(3)). The regulation's Example 3 rejects 'unimproved land located in Hood County with a fair market value not to exceed $100,000' because no specific parcel could be picked out from those words.

The description does not need a price, a contract or an escrow number. Legal 1031 notes the letter should be 'signed and dated by the taxpayer' and that properties need not be under contract to be named.

Send it to the QI or the seller, because notice to your own broker, lawyer or CPA is notice to yourself

The signed document must go to 'the person obligated to transfer the replacement property to the taxpayer' or to 'any other person involved in the exchange other than the taxpayer or a disqualified person', and the regulation names the parties, an intermediary, an escrow agent and a title company as examples (Reg. §1.1031(k)-1(c)(2)).

The IRS says it plainly in FS-2008-18: 'notice to your attorney, real estate agent, accountant or similar persons acting as your agent is not sufficient.' Your agent is a disqualified person, so a letter that stops in their inbox never reaches anyone who counts.

The seller of your replacement is a valid recipient even when that seller is related to you; the regulation's Example 2 accepts identification sent to a corporation the exchanger partly owned because it was the party obligated to transfer the property. Most QIs supply a form and confirm receipt in writing, and Legal 1031 calls delivery to the QI 'the safest course of action'. Read what a qualified intermediary is if you have not yet engaged one.

Email and fax both qualify because the rule says 'or otherwise sent', but what counts is arrival before midnight

The regulation accepts a document 'hand delivered, mailed, telecopied, or otherwise sent before the end of the identification period', and the Form 8824 instructions repeat the list as 'fax, hand deliver, mail, or otherwise send'. An emailed PDF of a signed letter to your QI fits 'otherwise sent'; a text message describing a property in prose does not meet the signed-document test.

The period 'ends at midnight on the 45th day' after your transfer (Reg. §1.1031(k)-1(b)(2)), with no extension for weekends or holidays, a point covered on whether the deadlines include weekends and holidays. Legal 1031 treats a letter 'postmarked by the 45th day' as timely if mailed, but a scan with a time-stamped confirmation from the QI removes any argument.

Ask your QI which channels it accepts before day 40, send the letter early enough to fix a bounced message, and keep the sent email, the QI's acknowledgement and a copy of the signed letter in your exchange file.

A DST or fractional interest is identified by the trust's name and the size of the slice you intend to buy

A DST interest is identified as real estate, since Rev. Rul. 2004-86 treats it as an undivided interest in the trust's property. IPX1031 reports three accepted ways to state the slice: the percentage of the trust, the percentage of each underlying property, or the dollar amount of equity being invested.

State the amount every time. JRW Investments cautions that a DST or TIC identification with no percentage or dollar figure 'may be interpreted as an identification of the entire property', which matters if your list is measured under the 200 percent rule explained on how many properties you can identify.

The sponsor's offering documents give the trust's legal name and each property's street address; use both. What a DST investor actually owns, and how the interest is sized to your leftover exchange cash, is covered on the traditional DST page.

Property already under contract still needs a letter; property already closed does not

A purchase contract is not an identification. Unless you actually take title before day 45, the property must appear in a signed written identification like any other candidate, and having it under contract on day 1 changes nothing about that requirement.

The exception is receipt: 'any replacement property that is received by the taxpayer before the end of the identification period will in all events be treated as identified' (Reg. §1.1031(k)-1(c)(1)), and the Form 8824 instructions tell you to enter the receipt date on line 5 in that case. The mechanics are on closing within 45 days.

Signing a replacement contract before your sale closes is common and permitted, as explained on contracting for the replacement before the sale closes, but the identification clock and letter run from your sale, not from the contract date.

Three entries you can adapt, using the format most QIs accept

These are illustrations with invented names, not legal templates; your QI's form controls. Each entry sits under a heading that states your name, the relinquished property address, its closing date and the sentence 'I identify the following as replacement property in my exchange', followed by your signature and the date.

Confirm the wording with your CPA or attorney before you send it, because a defective letter cannot be corrected once day 45 has passed.

• Fee simple: '1. 4820 Harbor Street, Springfield, State, APN 123-456-789, fee simple interest in the land and improvements.'
• DST interest: '2. A beneficial interest in Example Net Lease DST, a Delaware statutory trust owning 100 Retail Drive, Springfield, State, in the amount of $200,000 of equity (approximately 2.0% of the trust).'
• Alternates: '3. 77 Industrial Way, Springfield, State, APN 987-654-321. Properties 1 through 3 are identified as alternative replacement properties under the three-property rule.'