[1] What Is a Tenants in Common 1031 Exchange (TIC)? TICs mean that two or more investors
share ownership and fractional interest in properties purchased through a 1031 like kind
exchange. These combined TICs/1031 Exchanges are used by investors for wealth-building,
portfolio diversification, and lowering maintenance burdens on themselves.
[2] Tenants in common 1031 Exchange is a form of real estate asset ownership in the United
States in which two or more persons have an undivided, fractional interest in the asset, where
ownership shares are not required to be equal, and where ownership interests can be inherited.
[3] The tenants-in-common (TIC) structure is a legal arrangement that allows two or more
individuals to share commercial or residential property ownership. The shares of their ownership
can be any size; they do not need to be equal amounts like in a joint partnership.
[4] “RS Provides Guidance on Using Tenancy-in-Common Interests in 1031 Exchanges By
Ronald L. Raitz, CCIM | O n March 19, the Internal Revenue Service released Revenue
Procedure 2002-22, which addresses the use of real property fractional ownership interests as
replacement property in Internal Revenue Code Section 1031 tax-deferred exchanges.
[5] “In addition, when a tenants-in-common property is used in a 1031 Exchange, the exchanger
gains fractional ownership of an institutional-grade property. However, this approach comes with
risks. Cons The biggest risk to the taxpayer is that the exchange is not completed in compliance
with the IRS rules and, as a result, it becomes taxable.
[6] “Tenancy in common is a specialized type of commercial real estate ownership structure that
allows multiple owners of the same property. The exact number of owners allowed can vary by
state, but they usually cant exceed 35. No matter the number of owners, the total ownership
percentage cannot exceed 100%.
[7] “Reg. 1.1031 (d)-2 and IRC 1031 (a) (1). The drive to satisfy both the statutory deadlines and
reinvest all of the net proceeds in qualifying replacement property has spawned a boutique
industry of companies that sell undivided tenant in common (TIC) interests in real property, most
often triple net leased properties.
[8] “Get access to Tenants in Common properties for your 1031 Tax Deferred Exchange.
REQUEST LISTINGS Prospective clients can complete a quick form to receive current 1031
exchange TIC properties. BROWSE PROPERTIES Once approved, you can login anytime and
view current 1031 Exchange TIC properties. 1031 ADVISOR GUIDANCE
[9] “Tenants in common can take advantage of 1031 exchanges. The TIC structure is often
used specifically for this purpose. By pooling resources with other investors, you can buy a
more expensive property than you could on your own and still defer capital gain taxes. Of
course, there are some challenges to consider.
[10] “Tenants in Common 1031 TIC Investment Overview In a Tenants in Common (TIC)
structure an investor owns an undivided fractional interest in real property and shares pro-rata in
all the expenses and income of the property as well as depreciation benefits.
