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Old 11-04-2007, 10:17 AM
Senior MemberCaptains Club MemberPLEDGER
Join Date: Sep 2002
Location: Lander, Wyoming USA
Posts: 2,291
Default Re: 1031 Tenants in Common Arrangements


I am a CPA, as you are aware, and I am not a great big fan of TICs. My feeling is that these are merely partnerships that have been disguised as a real estate management program to satisfy the requirements of Sec. 1031. A person who sells real estate cannot defer the tax on that real estate sale by investing in a partnership, specifically excluded by Sec. 1031 and I believe that's exactly what these are. I look at these as the tax shelters of the 1980's, looked good, saved tax and had minimal economic substance. However, they are a big force in the country right now and apparently continuing to grow. As far as the commission, my only concern would be if your client were to get charged twice for the same product, notwithstanding the probability that the promoter has probably purchased the property from a related party for an inflated price in order to pander to those members of our society who don't want to pay taxes today if they can wait until later.
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