When Identifying Replacement Property in your exchange, you have three choices: You can use the Three Property Rule the 200% Rule or the 95% Rule.

The Three Property Rule allows you to identify up to 3 properties. You can purchase one, two or all three of those properties to complete your exchange. If you wish to purchase more than three properties, you will need to identify under the 200% Rule.

The 200% Rule is set up for you to identify as many replacement properties as you wish as long as the aggregate fair market value of all the identified properties does not exceed 200% of the relinquished property value. You may purchase any combination of these identified properties keeping in mind to be totally tax deferred you should purchase properties equal or greater in value to your relinquished property.

An exception to this rule is called the 95% Rule. You can choose to identify more than 200%, but if you do, you must purchase 95% of the values you identified or your entire exchange fails.