quirements under which the IRS may consider the purchase of a TIC interest an investment in real estate. Per Rev Proc 2002-22, "The central characteristic of a tenancy in common...is that each owner is deemed to own individually a physically undivided part of the entire parcel of property. Each tenant It's becoming a frequent challenge: property owners engaged in a 1031 tax deferred real estate exchange seek suitable replacement property. Operating under time constraints of the 45-day identification and 180-day completion deadlines, yet no appropriate investment has surfaced to meet their investment objectives. Then, a TIC appears on the investor’s radar screen – an investment vehicle called Tenancy in Common; or more commonly referred to as TIC property. Investors now have another option to complete their 1031 Exchange by becoming a tenant in common owner in Class A triple net multi-million dollar real estate here to fore unavailable to them. This TIC on the radar screen has become an aid to navigation for completing a 1031 Exchange.

Until March of 2002 many real estate investors were reticent to invest their 1031 Exchange proceeds in TIC properties, due to a lack of clarity with the IRS. Was it a feared partnership and its associated issues or was it a true, competently managed security? The answer depends on the nature of the TIC investment, which the IRS has now clarified in Revenue Procedure (Rev proc) 2002-¬22.

Rev Proc 2002-22, promulgated on March 19, 2002, cites the requirements under which the IRS may consider the purchase of a TIC interest an investment in real estate. Per Rev Proc 2002-22, "The central characteristic of a tenancy in common...is that each owner is deemed to own individually a physically undivided part of the entire parcel of property. Each tenant

objectives. Then, a TIC appears on the investor’s radar screen – an investment vehicle called Tenancy in Common; or more commonly referred to as TIC property. Investors now have another option to complete their 1031 Exchange by becoming a tenant in common owner in Class A triple net multi-million dollar real estate here to fore unavailable to them. This TIC on the radar screen has become an aid to navigation for completing a 1031 Exchange.

Until March of 2002 many real estate investors were reticent to invest their 1031 Exchange proceeds in TIC properties, due to a lack of clarity with the IRS. Was it a feared partnership and its associated issues or was it a true, competently managed security? The answer depends on the nature of the TIC investment, which the IRS has now clarified in Revenue Procedure (Rev proc) 2002-¬22.

Rev Proc 2002-22, promulgated on March 19, 2002, cites the requirements under which the IRS may consider the purchase of a TIC interest an investment in real estate. Per Rev Proc 2002-22, "The central characteristic of a tenancy in common...is that each owner is deemed to own individually a physically undivided part of the entire parcel of property. Each tenant

ar real estate here to fore unavailable to them. This TIC on the radar screen has become an aid to navigation for completing a 1031 Exchange.

Until March of 2002 many real estate investors were reticent to invest their 1031 Exchange proceeds in TIC properties, due to a lack of clarity with the IRS. Was it a feared partnership and its associated issues or was it a true, competently managed security? The answer depends on the nature of the TIC investment, which the IRS has now clarified in Revenue Procedure (Rev proc) 2002-¬22.

Rev Proc 2002-22, promulgated on March 19, 2002, cites the requirements under which the IRS may consider the purchase of a TIC interest an investment in real estate. Per Rev Proc 2002-22, "The central characteristic of a tenancy in common...is that each owner is deemed to own individually a physically undivided part of the entire parcel of property. Each tenant

RS. Was it a feared partnership and its associated issues or was it a true, competently managed security? The answer depends on the nature of the TIC investment, which the IRS has now clarified in Revenue Procedure (Rev proc) 2002-¬22.

Rev Proc 2002-22, promulgated on March 19, 2002, cites the requirements under which the IRS may consider the purchase of a TIC interest an investment in real estate. Per Rev Proc 2002-22, "The central characteristic of a tenancy in common...is that each owner is deemed to own individually a physically undivided part of the entire parcel of property. Each tenant

quirements under which the IRS may consider the purchase of a TIC interest an investment in real estate. Per Rev Proc 2002-22, "The central characteristic of a tenancy in common...is that each owner is deemed to own individually a physically undivided part of the entire parcel of property. Each tenant in common is entitled to share with the other tenants the possession of the whole parcel and has the associated rights to a proportionate share of rents or profits from the property, to transfer the interest, and to demand a partition of the property. "

Rev Proc 2002-22 establishes requirements which qualify a particular arrangement as a tenancy in common in real estate, rather than a partnership investment. These requirements include the following:

• Tenancy in Common Ownership: Each of the co-owners must hold title to the property as a tenant in common under local law.

• Number of Co-Owners: The number of co-owners must be limited to no more than 35 persons. A husband and wife are counted as one person in this instance.

• No Treatment of Co-Ownership as an Entity: The co-ownership (tenants in common) may not file a partnership or corporate tax return, conduct business under a common name, or otherwise act as a partnership or other business entity.

• Co-Ownership Agreement: The co-owners may enter into a limited co-¬ownership agreement that runs with the land. For example, such an agreement might provide that a co-owner must offer the co-ownership interest for sa