1031 exchanges are very often the best tool for property owners who are looking to make the most profit from their real estate investments. The 1031 exchange concept allows investors of real estate to exchange the profits from one piece of sold property into the purchase of another investment property.  At 1031TaxExchange.org, we specialize in providing 1031 exchange support for various types of commercial and residential properties. We will also guide you in deferring federal and state capital gains taxes as well as depreciation recapture when buying and selling investment properties. We can also help you find a Qualified Intermediary company to facilitate the complete process of a 1031 Exchange TIC.

 

Are you an investor hoping to enter into a 1031 tax exchange?  If so, there are a couple of issues you’ll need to understand:

The entire process must be completed within strict time limits. As the exchanger, you are allotted a 45 day window from the date the relinquished property closes to identify potential replacement properties. In order for the process to fully work, you’ll need to send a written notification of the potential replacement property (or properties) to your Qualified Intermediary.  This list must be complete with addresses or legal descriptions of the properties. Then, you’ll have 180 days after the close of the relinquished property to complete the purchase of the replacement property. After the initial 45 days has passed, you will not be able to change your property identification list.  The exchange will only work if you purchase one of your listed replacement properties.

To learn more about the entire exchange process, please check our 1031 exchange page.

1031 Exchange TIC:

As a real estate investor, Tenant in Common(TIC) Investments make it possible for you to become a buyer of investment-grade buildings with other investors.  So, while you might not be able to afford a multiple tenant property yourself, TIC investments give you the option of investing with others to own a fraction of a larger property.  Many people are interested in TIC deals because they offer a hands-off, shared property ownership as a way to defer capital gains taxes because a 1031 tax exchange can be applied to a TIC investment.  When an investor is facing high capital gains taxes with the sale of property, it is common practice to roll the money into another property, thus deferring those taxes.  However, many people do not want the hassles that come with the property management responsibilities that are normally associated with investment property, such as building maintenance and dealing with tenants.  Therefore, a popular alternative is to exchange into a fraction of a property that is maintained by a management company, thus lessening the headaches.

We can help you find TIC properties nationwide with the potential to:

The investment in a TIC property is a great alternative to sole ownership of real estate, but, like all real estate investments, there are common risks.  The loss of principle, variations in tenant occupancy, and limitations on management control of the property are all issues you’ll want to take into consideration before entering a TIC investment. However, TIC investments also offer certain benefits that counter these risks, such as lower investment minimums, lower overall risk, lack of active property management by owners, and the ability to use exchange money to invest. Unfortunately, the common real estate broker does not understand these details; therefore, we recommend that you talk to one of our 1031 exchange experts to take advantage of these opportunities.

Can I combine a 1031 property exchange with a TIC?

TIC properties, when correctly planned, may now be used as 1031 replacement property for purposes of a section 1031 exchange.

For many people, combining the 1031 tax exchange with the TIC concept is nothing new. Tenant in Common is just a means of co-owning real property. When properly organized, you will be able to exchange ownership in a relinquished property into a fractional ownership of replacement property (a TIC).  The 1031 tax exchange replacement property will typically be a larger piece of commercial real estate such as a shopping center, office building, or an apartment complex. The new property, now owned by yourself and many TIC owners, is usually professionally managed which makes it a popular hands-off investment.

It is often strategically advantageous for Tenant in Common investments to be identified as back-up replacement property in a 1031 exchange transaction rather than only identifying only one or two possible replacement properties.

If you would like us to contact you to discuss our replacement property services, please fill out our online form. We will respond within 24 hours.

Most frequently asked questions (FAQs):

Tenant in Common Investments – Real Estate or Securities?

Many Tenant in Common (TIC) deals have been under the control of the Securities and Exchange Commission (SEC) since 2002, which meant that only people with securities licenses could sell securitized TICs.  However, because the goods being exchanged are real property, the National Association of Realtors (NAR) has been lobbying for an equal opportunity to sell securitized TICs.  After much negotiation with the SEC, the lobbying efforts of NAR are finally paying off. It appears as though it is just a matter of time before real estate brokers will be able to offer securitized TIC deals to clients and receive a commission.

Learn more at:

www.NARexemption.com
www.TICexemption.com

Soon the NAR will have an equal opportunity to offer securitized TIC deals to their clients under the newly approved NAR exemption. Realtors and their clients will be looking at the attractive possibilities that this new TIC exemption will offer.

As soon as this new exemption is passed into law, we will offer real estate brokers referral fees on securitized TIC deals