1031 Tenants-in-Common ExchangeThe 1031 exchange, also referred to as a Starker exchange, is one of the most powerful tax saving tools for property owners and investors. Under IRS Section 1031, a property owner can defer capital gains and depreciation recapture taxes upon the sale of an investment property by using the proceeds of the sale to invest in a like-kind property of equal or greater value. Instead of finding a replacement property on your own, or in an area which is already highly appreciated, we can assist you in exchanging into an institutional quality property as a Tenants-in-Common, which offers more favorable property value, greater stability, access to much higher net income, and best of all, absolutely no management responsibilities. We have access to several major sponsors of institutional 1031 Tenants-in-Common (TIC) exchange properties. All of the sponsors that we represent have strong track records in Class A Office Space, Retail, Industrial, and Residential real estate, and collectively represent every major regional market nationwide. Through our broad property sourcing network, we can help you find the right 1031 TIC replacement property to suit your investment size and preferences.
Frequently Asked Questions:
Q: What is Tenants-in-Common (TIC)?
A: A TIC investment is a co-ownership of real property by two or more investors, who each have an undivided, fractional, and deeded interest in the property. All of the income, depreciation, and property value appreciation is shared pro-rata among the Tenants-in-Common, according to the size of each ownership interest. Institutional TIC properties are professionally managed for optimum value and maximum income potential.
Q: What is the required timeline for a 1031 exchange?
A: Once the original property is sold, IRS rules allow 45 days for identifying suitable replacement properties. The replacement properties need not be closed within 45 days, only identified and reported to a Qualified Intermediary. Once replacement properties are properly identified, the investor has an additional 135 days (180 days from the sale of the original property) to close the replacement property transaction.
Q: What is the minimum investment?
A: Current IRS rules allow a maximum of 35 Tenants-in-Common investors in any single property. The institutional TIC replacement properties that we offer typically have values of between $5 million and $100 million. In order to meet IRS requirements, minimum investment amounts start at approximately $200,000 and can reach as high as $1.5 million, depending on the total purchase price and the amount of leverage.