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Below are various resources available to assist in your 1031 Exchange:
1. Frequently Asked Questions
2. Glossary
3. Capital Gains Calculator
. Useful Links


1. Q. What investment amounts are ordinarily required for TIC?
    A. The minimum cash investment ranges from about $100,000 to $500,000. Although  it’s possible to own a TIC without debt, most investors need debt to achieve full deferral of taxes; therefore most investments provide for 50-70% of the investment to be assumption of debt.

2. Q. What liability exposure is associated with a TIC property investment?
    A. In most cases loans on the property are non-recourse (i.e. not personally guaranteed) so TIC owners are not liable personally; the lenders have recourse only against the property in the event of default. Normal risks of real estate ownership are mitigated with insurance. Some investors use a single owner LLC to limit liability exposure.

3.  Q. Are TIC investments for accredited investors only?
     A. In most cases TIC investments are offered only to accredited investors which are those who have a minimum net worth of $1 million or annual income of $200,000; however, we can assist non-accredited TIC investors as well.

4. Q. How long is the holding period for the most TIC investments?
    A. Most planned holding periods are from 4-8 years. Investors are informed of the planned holding period prior to the investment. However, changes in market conditions could accelerate or defer the planned sale date.

5. Q. Can I sell my TIC ownership?
    A. As long as the lender permits your transfer of ownership there is ordinarily no prohibition against selling your TIC real estate ownership to the public in the same manner as any other real estate.

6. Q. What happens to my ownership in the event of my death?
    A. Your ownership interest will pass to your heirs pursuant to your Will or Trust just like any other asset.  However, because current tax laws allow for a step-up in basis to the FMV at the time of death, no capital gains will be realized and no tax will be due if the property is sold after death at that FMV.


1031 exchange Internal Revenue Code Section 1031 states that no gain or loss is recognized where property held for investment or productive use in a trade or business is exchanged solely for property of like-kind which is to be held for investment or productive use in a trade of business.

Boot is cash or other property added to an exchange in order to make the value of the exchanged properties of equal value

Deferred Exchange refers to an exchange of one property for another of "like kind". The capital gain tax owed on the sale of the property or item is deferred until sale of the exchange property.

Direct Deeding is a transaction where a relinquished property or a replacement property is deeded directly to a buyer (not to a qualified intermediary first).

Disqualified Person refers to a seller's relatives (determined under income tax regulations) or agents (including your attorney and your accountant).

Escrow is an agreement between two or more parties, requiring that certain instruments, monies, or property be placed with a third party for safekeeping, pending the fulfillment of performance of a specified act or condition.

Exchange Period The period during which you must acquire the replacement property, beginning on the day on which you transfer your relinquished property and ending at midnight on the 180th day after that.

Identification Period is the 45-day period during which you must identify replacement property that begins on the day escrow is closed on the relinquished property.

In-Cash refers to the point in time when an investor has closed escrow on the relinquished property and is in the 45-day identification period of the 1031 exchange process. The money from the sale of the relinquished property is with a Qualified Intermediary, waiting to be reinvested into the replacement property.

Joint tenancy A form of joint asset ownership by two or more persons in which each person has an equal undivided ownership interest that passes directly to the surviving joint tenant(s) upon the death of any joint tenant. Real estate held in joint tenancy does not pass through probate following the death of a person with an ownership interest. Personal property such as fixtures and equipment, inventories, or vehicles held in joint tenancy does not pass through probate if the right of survivorship is stated in the title to the property. Any joint tenant can petition the court and compel partition of a joint tenancy asset.

Limited Partnership is a form of partnership in which there is one or more general partners, jointly and severally responsible as ordinary partners with liability, and one or more special partners, who are not liable for the debts of the partnership beyond the amount of cash they contribute/invest as capital.

Liquidity or liquid measures the ability to convert an asset to cash quickly.

Property or properties refers to legally owned real estate or possessions.

Qualified Intermediary is the disinterested third party that holds the funds from the relinquished property and releases the funds for the replacement property, and ensures that all IRS requirements are met.

Real Estate Provider is a real estate company that focuses on acquisition of institutional-grade investment property for the purposes of offering Tenants In Common investment opportunities.

Relinquished Property refers to the property that is given up in the 1031 exchange.

Replacement Property refers to the like-kind property received in the 1031 exchange.

Replacement Property Specialist® is a professional investment consultant, experienced in identifying suitable replacement property for investors seeking to complete a 1031 exchange, as well as making other real estate investment recommendations. Abbreviation: RPS.

Partition The judicial separation of the respective interests in property of joint owners or tenants in common so each may take possession, enjoy, and control his or her share of the property.

 Preservation of Capital When the cost value of an investment is maintained or increased.

 Section 1031 of the IRS code is the authorizing section of the IRS tax code that allows an investment property owner to defer capital gains and depreciation recapture taxes on a property sold.

Securities Licenses are required by securities law when investment advisors consult clients regarding TIC/CORE transactions and other investment interests in real estate. In addition to their real estate licenses, consultants, such as Replacement Property Specialists®, should hold both Series 7 and Series 63 securities licenses.

Tangible property Property that is capable of being perceived by the senses — generally, tangible property is real estate, personal property, or moveable property that has value of its own and is not merely a representation of real value. Land, machinery, buildings, business equipment, inventories, homes, and furnishings are examples of tangible property.

Tax Basis or Basis The tax basis in a property is equal to cost minus accumulated depreciation. When exchanging, the beginning basis is equal to the tax basis in the relinquished property, increased by any new cash (including any increase in non-recourse debt) that is paid in the acquisition of the replacement property. Tax basis is depleted through annual depreciation and increased by capital expenditure.

Taxpayer is the person conducting the 1031 exchange.

Tenants In Common or TIC is a way of sharing ownership of property among two or more persons in which each tenant holds an undivided interest in the entire property, either equally or in designated interests of differing sizes. TIC/CORE investors are on deed and considered separate owners of the real estate, sharing pro rata in the income, tax benefits, and appreciation of the property, with the properties employing professional asset and property management.

Trust is an arrangement whereby property is transferred to a third party (called the Trustee) by a grantor (called the Trustor). The trustee holds the property for the benefit of the Beneficiary.

Undivided interest The interest or right in property owned by each joint tenant or tenant in common. Each tenant has equal right to use and enjoy the entire property. Unless an agreement to the contrary exists, each tenant is entitled to an income share proportional to his or her ownership interest. If the property is sold, the sale proceeds are shared among tenants in proportion to the ownership shares held by each tenant.

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