What is TIC or Tenancy-in-common?
A TIC investment offers ownership in a real estate where two or more investors share an undivided, fractional interest in the asset. The shares of each investor in a TIC are not required to be equal, and ownership interests can also be inherited. Under a TIC arrangement, each co-owner receives a single deed at the time of closing for their undivided percentage of interest in the entire property. A TIC investor exercises the same rights and benefits as any sole owner of a property without the burden of managing the property. A TIC investment can either be privately arranged by investors or could be a syndicated TIC arrangement where a uniform set of rules apply to all investors. Most of the syndicated TICs are viewed as securities under federal security law. Why should I do a TIC 1031 Exchange?
What you need to know? Revenue Procedure 2000-37 has the guidelines for this type of investment. Any investment not conforming to these guidelines will be taxed normally, which means a big 'No' to the possibility of a 1031 exchange. This kind of investment must be vigilantly scrutinized for potential financial risks. You may require the assistance of your advisor or a 1031 expert. These investments are illiquid, and investors can't interfere in the management of the investment. Is a TIC 1031 Exchange investment beneficial for me? Of course, it is. If you are selling your investment property and don't want to have management responsibilities on your new property, there is no reason why you shouldn't invest in TICs. Post your investment in a TIC property; you will start receiving your share of income on a regular basis. How can I do a TIC 1031 exchange? For that, we need a few information like your basis, equity, etc. You can give us a call at 888-993-2835 and speak to one of our 1031 exchange experts. They will assist you with everything related to investment.
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October 2019
Commercial Real Estate |