The Tenant-in-Common structure utilized for TSG clients offers a unique solution to the restrictive rules of IRC §1031. In general terms, the Tenant-in-Common structure allows owners seeking to close out of a like kind exchange to purchase an undivided fractional interest in property.
Due to restrictive timing rule of IRC §1031, taxpayers wishing to engage in a tax-free like kind exchange are under pressure to identify and acquire suitable property. Accordingly, many owners have failed to find suitable replacement property. With this in mind, the Tenant-in-Common structure was specifically designed to provide persons seeking to engage in a tax-free like kind exchange with a viable replacement property solution.
No other §1031 investment program has been more extensively researched and supported than ours. The investment structure is backed by a legal opinion from a leading global law firm whose tax practice group has had an international focus since the firm was established. The structure also conforms with IRS and Treasury Department rulings (Revenue Procedure 2002-22).
Benefits of the TIC structure for §1031 Transactions
- Available properties are ready for purchase
- Flexibility to match, on a dollar-for-dollar basis, the debt and equity that must be replaced to obtain tax-free treatment
- Ownership (title and deed) of property
- Passive rental income
- Deferred capital gains
- Access to large commercial assets
- Triple net leased properties with investment grade tenants
- Above average rate of return on investment
- Exit strategies for investors