When you think about real estate and all of the taxes that can be associated with it, you soon start to take an interest in tax shelters and how to use them. There are many things to learn, but if you would like to keep more of your money and not pay taxes that you do not need to, then you need to learn these things.
The TIC 1031 exchange is one method of a tax shelter that can help in many cases. The letters TIC stand for tenant in common. In other words, it is one piece of undivided property that is treated by the government as one parcel but is owned by two or more individuals or entities
TICS are beneficial to the smaller, individual investor. They offer a chance for that type of investor to get in on larger investments that they would not be able to otherwise.
When it comes to a Tic investment, there are some advantages to consider. For one, it allows a lot greater equity power for the small investor. Two, it makes it possible to split the investment funds up geographically, which can be a big benefit and really pay off.
There are also risks involved with a TIC, like any other investment type. For example, it works as the tax code reads now, but that could change at any point and that may leave you scrambling to figure out how to deal with that. It is also always a concern when you put yourself in a situation where you are reliant on others.
The 1031 exchange can be a big help to those who simply want to change where they have their money invested. The taxes can scare people into staying in their current investments when they do not know about the tax shelters.
When doing this type of activity to shelter the money from taxes, it is required by law that you use a 3rd party qualified person or company to handle the money in the interim between selling the first property and reinvesting it into another. This does cost a little bit, but it is not only required but can be very helpful to make sure that you do not make any large mistakes
The tax code line number 1031 is all about this type of tax shelter and that is where it got its name. The 1031 exchange has been a great way and a favorite among some to defer the taxes from the sell on property. However, it should not be used to try to cheat the government. If you do this, it could cost you a lot more in the long run.
Author Resource:
A TIC 1031 exchange is a great way for individuals investors to protect their investment money from unnecessary taxes. However, all kinds of a 1031 exchange are good for investors.
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")