Volume 2, Issue 6
2nd Quarter 2008

By Bill Riker
Securities America, Inc.
ph: 808.298.6530

How Can a “Tenants In Common 1031 Exchange” Benefit You?

You may own management-intensive real estate and want to free yourself from the associated problems. Although you may be comfortable with real estate investing, and have had good returns in the past, you do not like the daily headaches that can accompany real estate management. You are ready to give up the hassles of dealing with tenants, maintaining facilities, paying bills, etc. You would like to sell your property but are faced with huge tax consequences on the sale. You’d rather enjoy the income from the property while leaving management to someone else. With a TIC 1031 Exchange, you can do exactly that.

A TIC 1031 Exchange allows you to exchange your management-intensive property for institutional- quality property with the potential to generate steady income, tax-benefits and appreciation. With a TIC 1031 Exchange, you no longer have to feel burdened by your real estate. A manager will be retained to manage the asset while you enjoy all the benefits associated with the ownership and freedom from management duties.

Your income from the replacement property could be higher than what you were receiving from the original property, depending on your leverage. You can earn substantial cash flow that may be significantly offset by the depreciation of your basis in your new TIC purchase.

No capital gains taxes may be due until the replacement property is sold. If you pass away while owning a property, your heirs may receive a stepped up basis and the capital gains tax could be completely avoided.

There are restrictions on transferring TIC interests: these are not liquid investments. Higher degrees of leverage can increase your investment risk. There are a number of significant tax risks involved with the purchase of a TIC interest; investors should consult their own tax advisors and legal counsel. TIC 1031 Exchanges are not suitable for all investors and are for accredited investors only. Please refer to the offering memorandum for complete information including fees, expenses, and risk associated with this type of investment.

For further information, please contact Bill Riker at 808.298.6530. Located at One Main Plaza, 2200 Main Street, Suite 528 Wailuku, HI 96793. Bill has been in his present location, working as an financial advisor, specializing in Charitable Remainder Trusts since 1994.

 

About the Author: Bill Riker is a Registered Representative of and offers securities through Securities America, Inc., Member NASD/SIPC. Advisory services offered through Securities America Advisors, Inc.
This is neither an offer to sell nor a solicitation offer to buy any securities.

Bill Riker
Phone: 808.298.6530
One Main Plaza
2200 Main Street Suite 528
Wailuku, HI 96793

This is neither an offer to sell nor a solicitation offer to buy any securities.

Statements or expressions of opinion appearing herein are those of the authors and not necessarily the views or opinions of MAUI, A Property Portfolio LLC, its publishers or staff. MAUI, A Property Portfolio LLC, its publishers and staff disclaim any liability arising from reliance upon any information or opinions contained herein.