Alternatives to Investment Property

No Management with Benefits of Income, Tax Shelter, Appreciation & Depreciation

Tenant-in-Common (TIC) Exchanges Smaller investors can now invest in larger, professionally managed real estate and enjoy the benefits of tax shelter, growth, leverage and income without the thrill of management. An exchange is not necessary to purchase a TIC Property. Funds from other sources can be used.

The Internal Revenue Service issued Revenue Procedure 2002-22 on March 20, 2002 giving definitive guidelines for structuring tenant-in-common (TIC) exchanges. Now, taxpayers can exchange into a deeded share of a large, professionally managed property such as a Home Depot, Walgreen’s, Staples, etc. For several years sponsors have sold TIC investments as replacement properties in 1031 exchanges. A variety of office, retail, apartment, and other properties are available. Many investors have purchased Oil and Gas Royalties, which are also allowed.

All of the standard 1031 procedures are followed when investing in TIC properties, including the use of a qualified intermediary. The qualified intermediary prepares the required documents and escrows the sale funds until the taxpayer selects a tenant-in-common investment for a replacement property. Some taxpayers are identifying tenant-in-common investments as a back-up in the event they cannot find suitable replacement property.

The recognition of tenant-in-common interests by the IRS presents a new option for the average investor. Previously, large investors have been using these as single buyers. Since the ruling, investment in TICs has doubled each year, to almost $2 Billion for 2004, and over $4 Billion in 2005.

Many alternative tenant-in-common offerings are available. The minimum investment is usually $100,000 and the return ranges from 6% to 12%, some have debt in place, and others are all cash.

Contact Jack Shea CES (Certified Exchange Specialist), or Daniel Imbior CES ~ (Certified Exchange Specialist) at Keys Capital Inc. 727-581-7000 for information on available TIC properties or with any other questions on the 1031 Tax Exchange.

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