TIC Agreement and 1031 Exhange

[Franklin Marquette]

Hello,

I own a property with some friends as tenants in common. I am the only one who lives there to oversee the renovation we are doing. It is classified as my primary residence and is under a primary residence loan. If we sign a TIC, will it likely ALWAYS, no matter how simple, be interpreted by the IRS and therefore disqualified for a 1031? OR is there some form of simple "1031 safe" TIC agreement out there? I am fine just going forward on trust because theses are close friends but if we can have some form of TIC agreement without risking losing the ability to 1031 upon sale, I would like to get that in place.

Thanks!

Franklin

[Bill B.]

You aren’t losing the 1031 because of the tic. You’re losing the 1031 because it’s your primwry home< not an investment property. That SHOULD be better, at least for you. Your portion should be completely tax free. Up to $250k if single. Not sure how the IRS treats primwry homes owned by multiple people who a rent all treating it as their primary. I GUESS! If they are charging you fair market rent for their portion MAYBE they could do a 1031? But remember. Thsi can’t be a flip. Those also don’t qualify for a 1031. 

If they trusted you I would have bought it a just your primary and had them loan you money for interest or interest okay portion of profit at sale?

Anyway…enough of my guesses. You’ll need an expert like @Dave Foster in regards to the 1031 portion. And maybe another expert like @Michael Plaks or your own CPA in regards to the IRS/tax portion. 
. 
good luck.