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Playing the commercial market with TICs |
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 Got an extra million dollars burning a whole in your pocket? If you've just sold a large investment property and are facing a huge capital gains bill you might be tempted to roll it over into a TIC investment. If you don't investigate your options carefully and plan ahead you could be in for a nasty surprise.
The advise you seek before considering any transaction could literally save you millions. One of the latest trends in real estate tax-deferral strategies is rolling investment property equity on a sale transaction into a Tenant in Common investment with up to 30 other individuals. The aggregate buying power under a TIC structure can be alluring to an investor as it can give them access to high quality commercial and industrial properties they could otherwise not afford to own. Business Week profiled some of the perils of TIC investing in Peter Coy's article "A Capital Gains Gambit". They were quick to identify a lot of the perils and downside of TIC investing, such as: buyers often overpay in their rush to meet IRS deadlines
sponsors of TIC deals often overpay to get the deal done
related fees can add up
the governance between owners of a TIC investment is clumsy The bottom line is that a TIC investment can still be a very worthwhile investment for individuals seeking to defer capital gains taxes, it just pays to shop around, plan ahead, and due your due dilligence.
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