3-Property Rule
You may identify up to three replacement properties, of any value, and buy any or all of them.
Definition
The most-used identification rule: you can name up to three potential replacement properties regardless of their total value, and then acquire one, two, or all three. Most exchangers use this rule because it is simple and their total value fits comfortably.
Why it matters
If you only need one or two targets, the 3-property rule is the safe default — there is no value ceiling to track. Only reach for the 200% or 95% rules when you need to identify four or more.
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.