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1031 Exchange |
Tenancy-in-Common | TIC Investment | Section1031 | TIC/CORE
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TIC is also known as Co-ownership of Real
Estate (CORE)
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1031 Exchange and
Tenancy-in-Common:
Seeking the Right Advisor to Achieve
TIC Investment Objectives
A long-established section in the
federal tax code, section 1031, allows real estate investors to
sell property that has been held for investment purposes and defer
capital gains and depreciation recapture taxes if they acquire
"like-kind" exchange property of equal or greater value and reinvest all
of their equity.
Since the mid-1990s, many investors have experienced the benefit of
reinvesting their equity into investment property interests structured
as Tenancy-in-Common (TIC). TIC owners hold an undivided
fractional ownership interest in investment property evidenced by a deed
of trust.
TIC, also known as Co-ownership of
Real Estate (CORE), enables an investor to participate in the
ownership of institutional-grade, professionally managed investment
properties. The investor's equity can be diversified amongst several
different properties, geographic markets and real estate companies,
potentially increasing both the value and safety of the real estate
investment.
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TIC/CORE investments are designed
to offer preservation of capital, predictable cash flow and long-term
appreciation in institutional-quality investment property assets that
benefit from greater economies of scale. |
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features and benefits, TIC/CORE is an increasingly popular 1031
exchange option for many real estate investors. However, 1031 exchanges
and TIC/CORE transactions are very complicated, with both tax and legal
issues topping the list of potential pitfalls. It is therefore essential
that investors be knowledgeable about what to look for in a quality
advisor. Financial advisors are
required by securities law to be properly licensed in order to consult
clients regarding TIC/CORE transactions and other investment
interests in real estate. Financial advisors should hold both Series 7
and Series 63 securities licenses to qualify them as knowledgeable,
well-rounded consultants in the investment process. It is essential that
they have experience in the commercial real estate business, in addition
to an understanding of personal investment objectives and client
suitability issues.
But perhaps the most important component to look for in a TIC financial
advisor is their intimate, trusted and deeply rooted relationships with
key real estate companies. This attribute is critical to their ability
to provide the best opportunities for their clients. There are almost 80
real estate companies across the United
States that are either already involved or considering involvement in
the TIC/CORE industry as a real estate provider. As with any
industry, these 80 companies represent varying degrees of acumen,
experience and quality. To achieve the greatest potential for a client,
a financial advisor should have consistent access to the top ten percent
of these companies in order to provide their client access to the best
properties available. Obviously, a new financial advisor with little or
no experience or industry knowledge may not have access to the top real
estate providers, as these providers prefer to work with experienced
consultants that specialize in this unique segment of the market.
Investors should also be aware of how their financial advisor stacks up,
looking for a history of successfully completed transactions. A long and
proven track record indicates that a financial advisor is an experienced
professional. An investor wants such an advisor in their corner asking
all the right questions, making appropriate and suitable
recommendations, understanding the nuances of successfully completing
TIC/CORE transactions and providing answers to any and all tax and legal
questions.
When considering a 1031 exchange or
TIC/CORE investment, investors
should ask the following specific questions of the financial advisor:
1031 Exchange and
Tenancy-in-Common:
Seeking the Right Advisor to Achieve
TIC Investment Objectives
Article CONTINUES....
Generally, if you exchange
business or investment property solely for business or
investment property of a like-kind, no gain or loss is
recognized under Internal Revenue Code Section 1031. If, as part
of the exchange, you also receive other (not like-kind) property
or money, gain is recognized to the extent of the other property
and money received, but a loss is not recognized.
Section 1031 does not apply to exchanges of inventory, stocks,
bonds, notes, other securities or evidence of indebtedness, or
certain other assets.
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1031 Exchange |
Tenancy-in-Common | TIC Investment | Section1031 | TIC/CORE
TIC is also known as Co-ownership of Real
Estate (CORE)
WWW.TIC-1031EXCHANGEFACTS.COM
is not a securities broker dealer and
does not sell securities.
Under no circumstances are the contents of this section or any other section
of this website to be deemed tax or legal advice.
Investors are urged to consult their tax and/or legal advisors before making
an investment in a 1031 Exchange - tenant in common (1031 TIC)
product.
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Apartment Rental
Facts
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