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Tenant In Common (TIC) Purchase Interests Agreement: What it Includes & Important Items to Consider
Tenancy in common (also referred to as TIC ) is one way for investors to own real estate in concert with others. In a TIC structure, the co-owners can own different shares (in other words, Owner A might hold 90% while Owner B holds the remaining 10%; or ten co-owners could have equal shares), and they do not have the right to survivorship if one of the other owners dies. Tenancy in common is sometimes conflated with joint tenancy, but those two differences are fundamental: in a joint tenancy, the owners hold equal shares and maintain the right to survivorship.
What Is the 65-Day Rule?
While income tax rates and rules for individual and married taxpayers are complicated enough, the application of rates and thresholds to trusts adds a layer of complexity to financial planning. The 65-day rule relates to distributions from complex trusts to beneficiaries made after the end of a calendar year. For the first 65 days of the following year, a distribution is considered to have been made in the previous year.
Can You Do a 1031 Exchange from a Residential to Commercial Property?
A residential property that is not a primary residence and meets the 1031 exchange criteria can be exchanged into a commercial property. Outside of following the 1031 exchange rules, there really aren’t any special considerations. The investor is basically going from a smaller investment property to a larger one. In this article, we’ll look into the details of what’s involved when doing a 1031 exchange from a residential to commercial property.
What Are the Requirements to Form a Delaware Statutory Trust (DST)?
Delaware has long been known to offer a corporate-friendly environment, which offers benefits relating to tax liability, convenience, and legal protection in corporate affairs. Delaware Statutory Trusts were formed per the Delaware Statutory Trust Act, which was written to simplify the arrangement of a structured real estate transaction (or other assets).
What Is a Hybrid REIT?
REIT Investment Basics At the foundation, a Real Estate Investment Trust (REIT) owns, finances, or invests in real estate or real estate-related assets. Investors can buy shares in REITs as they would invest in equities, but they are purchasing an interest in a real estate portfolio or a particular asset. There are some specific characteristics of REITs, including the following:
What Are the Fiduciary Duties Involved with Delaware Statutory Trust (DST) Investment?
Within the Delaware Statutory Trust structure, there are typically two participants: trustees and beneficiaries. The DST offers management and ownership flexibility, but there are certain duties and obligations that must be fulfilled by each party.
What Is Structural Risk?
Contrary to what the name suggests, structural risk has nothing to do with the physical structure of the building. Structural risk refers to the financial structure of the investment and the rights that the structure provides to the individual participants. No real estate investment is invulnerable to risk, and investors must understand the potential dangers.
Can a Tenant in Common Rent or Lease Their Share of Property?
A Tenant in Common arrangement, also known as Tenants-in-Common, or TIC, involves a shared ownership of a property. In this type of arrangement, each owner owns a specific “piece” of the asset; and many times, those pieces, or shares, can be of unequal sizes. This is also known as fractional ownership, and it can help investors to better diversify their portfolios, or to have access to higher quality assets.
Can a Tenant In Common Mortgage Property?
Gathering three or more people into a tenancy in common (TIC) arrangement can be one way to buy and hold real estate. This type of set-up can help investors secure better-quality real estate, with a potentially higher targeted cash flow.
Can an S Corp Do a 1031 Exchange?
A 1031 exchange isn’t just for a solo investor seeking to defer capital gains taxes on the sale of a commercial investment property.
