TICS ARE THE ULTIMATE EXIT STRATEGY

TICS ARE THE ULTIMATE EXIT STRATEGY

There are two problems that every real estate investor must one day face – How can I exit from all my real estate investments, pay no capital gains taxes and achieve maximum income for retirement?  And secondly, when I die, how do I pass along all the real estate equity and income to my heirs or beneficiaries who may have no interest in or experience with real estate investment?

TICS are the answer to both of these vexing problems – They provide the best way for real estate investors to transition from active, sole-owned property investment to less-active, jointly-owned property investment.  And TICS (tenants in common real estate) enable all investors to plan their ultimate exit strategy so that when they die, their heirs can benefit from maximum equity and income transfer and minimum taxes and other disruptions.

Since TICS can be used with IRS section 1031 tax deferred exchanges, the investor can sell any or all of his current properties and use the 1031 exchange to buy TICS and defer all capital gains taxes or depreciation recapture.  Once the investor owns the TIC property, they enjoy the many benefits, such as regular monthly income, no management hassles, total tax sheltering of their income when segregated cost accounting is used and maximum upside profit potential.

After the investor has enjoyed the benefits of TIC property ownership for many years, they will eventually pass away.  With TICS, this is much easier than with sole-owned and self managed properties.  When the TIC investor passes away, their deeded property interest passes along to whomever they designate, typically children or grandchildren.  There is nothing these heirs or beneficiaries need to do except receive the monthly income.  They do not need any expertise in real estate to do this. 

This is in contrast to when an investor dies holding many individually owned and managed properties.  In such cases, families are thrown into a nightmare of property identifications, management issues, taxes, forced liquidations and much more.

There is no better way to exit self-owned and managed real estate for a better retirement and smoother transition of assets upon death than tenants in common properties.  This is why they have grown from one billion dollars of property purchased in 2003 to twenty billion dollars of property purchased in 2007.