CES Exchange Timelines & Deadlines 2

Question 1

Which identification rule allows a taxpayer to identify any number of replacement properties as long as their combined fair market value does not exceed 200% of the relinquished property's FMV?

Accepted Answer

200% rule

Answer

The 200% rule allows identification of any number of properties as long as their aggregate FMV does not exceed 200% of the relinquished property's FMV.

Question 2

Under the three-property rule, how many potential replacement properties may a taxpayer identify?

Accepted Answer

Up to three properties regardless of value

Answer

The three-property rule allows identification of up to three replacement properties regardless of their combined fair market value.

Question 3

The 95% rule allows a taxpayer to identify any number of properties, but requires that:

Accepted Answer

At least 95% of the identified properties be acquired

Answer

Under the 95% rule, a taxpayer may identify any number of properties but must actually receive 95% or more of the aggregate FMV of all identified properties.

Question 4

When does the 45-day identification period begin?

Accepted Answer

On the date the relinquished property is transferred to the buyer

Answer

The 45-day identification period begins on the date of the actual transfer (closing) of the relinquished property.

Question 5

Must replacement property identification be submitted in writing to qualify under IRC 1031?

Accepted Answer

Yes, identification must be in writing and signed by the taxpayer

Answer

Treasury Regulations require that replacement property be identified in a written document signed by the taxpayer and delivered to the QI or another qualified party.

CES - Certified Exchange Specialist Practice Test

CES - Certified Exchange Specialist Practice Test

CES Exchange Timelines & Deadlines 2