Tax Opinions in TIC Offerings and Reverse TIC Exchanges

Tax Management Real Estate Journal, Vol. 23, p. 88, March 7, 2007

26 Pages Posted: 14 Jan 2007


Property owners often acquire tenancy-in-common (TIC) interests as replacement property in section 1031 exchanges. Generally, TIC interests are sold as securities under federal and state securities laws, and their offering materials include a tax opinion addressing whether the TIC offering is a tax partnership. This Article explains that opinion writers consider whether the TIC offering satisfies the conditions of Rev. Proc. 2002-22 when writing tax opinions. If a TIC offering satisfies all of the Rev. Proc. 2002-22 conditions, the opinion writer will most likely write a should opinion. If the TIC offering does not satisfy all of the conditions, the opinion writer may or may not write a should opinion, depending upon which conditions the offering fails to satisfy. The Article explains the effect failing to satisfy the conditions has on tax opinions.

Several issues arise when an exchanger attempts to acquire a TIC interest as part of a title-parking reverse exchange. The Article explains that a TIC interest's status as a security often makes parking title to the interest difficult. To avoid such difficulties, the Article recommends structuring title-parking reverse exchanges as exchange-first transactions, if the exchanger is attempting to acquire a TIC interest as replacement property.

Keywords: tenancy-in-common interests, 1031 exchange, TIC offerings

Suggested Citation

Borden, Bradley T. and Keator, Todd D., Tax Opinions in TIC Offerings and Reverse TIC Exchanges. Tax Management Real Estate Journal, Vol. 23, p. 88, March 7, 2007, Available at SSRN:

Bradley T. Borden (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States


Todd D. Keator

Thompson & Knight LLP ( email )

1700 Pacific Avenue
Dallas, TX 75201-7322
United States

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