The short answer
The 200% rule lets you identify any number of replacement properties as long as their combined fair market value at the end of the identification period does not exceed 200% of the combined fair market value of everything you relinquished, measured on the dates you transferred it. It is the alternative to the three-property rule in Treasury Regulation section 1.1031(k)-1(c)(4)(i)(B). You need it only when your list holds four or more properties.
At a glance
| Cap | Total identified value up to twice the value relinquished |
|---|---|
| Value dates | Replacement at the end of day 45; relinquished at its transfer |
| Number | Unlimited, as long as the total fits under the cap |
| If exceeded | Treated as no identification unless the 95% rule is met |
The cap compares two values taken on two different dates
Paragraph (c)(4)(i)(B) of the regulation allows 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 as of the date the relinquished properties were transferred." The test uses fair market value rather than your equity.
Every identification not revoked in writing counts toward the total, including property you already received during the 45 days. The regulation's illustration: a taxpayer who sold a $100,000 property and received $50,000 of replacement property early could identify any number of further properties worth no more than $150,000 in total.
For replacement property still to be built, paragraph (e)(2)(ii) uses its estimated fair market value as of the date you expect to receive it.
Worked example: four properties worth $180,000 against a $100,000 sale
In the regulation's Example 5 the taxpayer sells a $100,000 property and names L, M, N and P, worth $30,000, $40,000, $50,000 and $60,000. Four names break the three-property rule, but the $180,000 total is under the $200,000 cap, so all four are validly identified.
A current hypothetical: you sell for $1,000,000, so your cap is $2,000,000. You name a $900,000 fourplex and five DST interests of $200,000 each, a total of $1,900,000, which fits. If the fourplex is worth $1,200,000 at the end of day 45, the total becomes $2,200,000 and the whole list fails. Run your own numbers with your CPA.
The regulation does not say how to value a partial interest in a DST offering. Identifications of DST interests commonly state the dollar amount of beneficial interest to be bought, and that amount is what gets added up; confirm the approach with your intermediary and CPA before relying on it.
Where it bites: values move during the 45 days, and an oral change does not count
In the regulation's Example 7 the taxpayer names V and W, then Y and Z, and revokes V and W by telephone. The oral revocation is invalid, all four count, and their $310,000 total exceeds the $200,000 cap, so the taxpayer is treated as identifying nothing even though Y and Z are later bought.
The only rescue for a list that breaks both limits is the 95% rule. Build in a margin under the cap, and compare against our answer on how many properties you can identify and the DST backup strategy guide before day 45.
Related questions
Is the 200% measured on price or on equity?
On fair market value. The regulation compares the fair market value of the identified properties with the fair market value of the relinquished properties, not your equity in either.
Does property I already closed on count toward the 200%?
Yes. Property received during the identification period is treated as identified, and all identifications that were not revoked count toward the total.
What if an identified property's value rises after day 45?
For the 200% test, replacement values are taken as of the end of the identification period, so a later rise does not change it. The 95% rule uses a different date: the earlier of receipt or the end of the exchange period.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.