TIC – Tenant In Common

Many investors have increased their real estate wealth - at least on paper. Increased real estate values in some parts of the U.S. have created complex planning issues for many real estate investors to deal with. In most financial matters, additional wealth also comes with more   planning challenges, and investing in real estate is no different. Because many people have accumulated a significant net worth in real estate, evaluation, education, and constant decision-making are important to nurture and protect such wealth.

Many real estate investors have used a standard 1031 tax-deferred exchange to sell a property and buy a new like kind property without incurring current taxation -- but today:

Some Sellers Need An Alternative To The Standard 1031 Tax-Deferred Exchange

Investors may be reluctant to sell because of the worry about the large income tax bill they might have to pay. This hesitancy is especially true if they should happen to own investment real estate, because they might have both capital gain taxes and depreciation recapture taxes associated with the sale. In some cases, quality properties could be hard to find, and tenants might be harder to deal with.

An Efficient Alternative Is The “TIC – Tenant In Common 1031 Tax-Deferred Exchange”

A TIC – Tenant In Common is a special type of real estate that qualifies as a 1031 tax-deferred exchange replacement property. A TIC is a percentage ownership of a large piece of institutional grade property, allowing real estate investors, in many cases, to exchange out of a self-owned and self-managed individually owned property into a percentage ownership of a larger, higher quality property, managed by a team of real estate management experts. An owner of a TIC owns a specific percentage of the property and receives a grant deed for their exact ownership percentage.

Examples of TIC real estate could include office buildings, shopping centers, apartment buildings, industrial properties, warehouses, raw land, and even oil and gas interests. A TIC is true real estate ownership, qualifying for a 1031 tax-deferred exchange, without the sellers having to locate the replacement property, and in many cases, dramatically increasing their net income. Long term success in real estate investing can potentially be achieved through a disciplined, powerful, and straight-forward process.