1031 Tenant in Common

What Is A 1031 Tenant In Common Exchange?

A 1031 Tenant in Common exchange (TiC) is an opportunity for a small investor searching for a like kind replacement property under the 1031 deferred exchange rules, to own a common interest in a larger real estate investment.  Since the IRS issued clearer guidelines in 2002 relating to the 1031 TiC exchange requirements, TiC 1031 exchanges have become an attractive option to an increasing number of investors looking for an investment that will generate a passive income over the longer term, as well as enabling them to defer payment of capital gains tax.

There are several advantages of 1031 Tenant in Common investments for the smaller real estate investor looking to have the chance of owning a fractional interest in a larger commercial, industrial or commercial investment.  Under the 1031 TiC exchange rules smaller property investors now have the opportunity to buy interests in real estate investments that would in the past have been the domain of larger institutional investors. 

Tenant in Common 1031 exchange properties are usually available as part of a package that already has prearranged financing and management.  These types of 1031 exchanges present the opportunity to receive passive income without the need for active property management and the work that this can involve.  As with any tax and financial issues, it is always advisable to consult a professional tax advisor or other qualified intermediary for the best advice for your individual circumstances.