200% Rule
You may identify any number of properties, as long as their combined value is under 200% of what you sold.
Definition
The 200% rule lets you identify any number of replacement properties — four, five, more — provided the total fair-market value of everything you identify does not exceed 200% (twice) the value of the property you sold. It is the rule to use when you want many candidates and their combined value stays within that cap.
Why it matters
Exceed the 200% cap and — unless you satisfy the 95% rule — your identification is treated as if you named nothing, and the exchange fails. Track the running total carefully.
Related terms
General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.