1031TICs and BBQ Chicken....

Frequently we get calls from people who want to do a “1031 TIC.” Or maybe even a “TIC 1031.” And if you could combine two words any more ways, we’d probably get requests for those as well.

The terms ‘1031’ and ‘TIC’ are often used in conjunction, usually for the purposes of marketing Tenant-In-Common real estate. So much so many are beginning to think they're synonymous. I Googled “TIC” and found ‘1031’ 16 times on the first page! [update: this was a fad at the time this Tee-Shot was broadcast. I Googled TIC again and 1031 didnt appear at all. Info in this article is still good, though] But they are in actuality two very different things that happen to go very well together. Like bar-b-cue sauce and chicken.

A 1031 exchange is A LEGAL METHOD of selling and buying real estate and investment property without paying taxes on the capital gain. It is named after Section 1031 of the Internal Revenue Code. You can 1031 a restaurant, a farm, or a luxury jet.

You can also 1031 a TIC!

A 'TIC' (Tenant-In-Common) is a TYPE OF REAL ESTATE where different investors buy individually deeded parts of a single piece of real estate together. You might buy a TIC, inherit a TIC, acquire a TIC in a trade. Or you might 1031 exchange into a TIC! 1031s and TICs are not the same thing, but they work really great together.

You can bar-b-cue ribs, bar-b-cue beans, and bar-b-cue pork. You can also make chicken cacciatore, chicken soup and fried chicken. Though ‘Bar-b-cued chicken’ is commonly spoken as one word, it’s actually two very different things that combine really well.

So it is with 1031s...

...and TICs...

...AND 1031 TICs.

--The Experts