Understanding the "Tax Free" Exchange (Part 3 0f 5)

In May of 1991, the Internal Revenue Service adopted final regulations which clarified many of the issues. Here are some of the major highlights:

1. Identification of the replacement property within 45 days. According to the IRS, the taxpayer may identify more than one property as replacement property. However, the maximum number of replacement properties that the taxpayer may identify is either three properties of any fair market value, or any number of properties as long as their aggregate fair market value does not exceed 200% of the aggregate fair market value of all of the relinquished properties.