The Identification Rule...

I know what I want to buy, but I'm not sure where. Does that satisfy the IRS's Identification Rule?

Identification must be clear enough for your average IRS agent to go from your 45-Day Identification form to the property you have identified. Street addresses are fine. An identification of the main address of a 50 unit condominium tower without a unit number, however, does not do this. You must identify it as "Unit 203, Imperial Condominium Tower, 1027 Main Street, Smithtown, Texas."

Legal descriptions are necessary when the property involves bare land that does not have a legal address. We’ve had clients identify property as "40 acres on the northeast corner of Highway 71 and Interstate 100, Smith County, Texas."

--The Experts

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