Tenants in Common (TIC) 2027 Fractional Ownership Tax Basis Calculator

Calculate your tax basis, depreciation, income share, and 1031 exchange eligibility as a TIC fractional owner. TIC structures let multiple investors own undivided fractional interests in a property — each can independently 1031 exchange their share.

Total property purchase price (USD)

Your ownership share (%)

Total number of TIC owners

Loan-to-value financing (%)

Annual NOI (USD)

Land portion of basis (%)

Your tax basis as TIC owner

Cash equity + share of mortgage debt

Your cash equity in

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Share × down payment

Your annual depreciation

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Share of building / 27.5

Your annual NOI share

Cash distribution before debt service

Component	Total property	Your share (' . '%)

TIC tax benefits: As a TIC owner, you hold an undivided fractional interest in the property — distinct from a partnership LP interest. You report income and expenses on Schedule E, take your share of depreciation, and can independently 1031 exchange your TIC interest at sale (Rev. Proc. 2002-22). Up to 35 TIC owners allowed per property. Each owner files their own tax return — no K-1 from a partnership.

What is a Tenants in Common (TIC) ownership structure?

A Tenants in Common (TIC) arrangement allows two or more investors to hold direct, undivided fractional ownership of a single piece of real estate. Unlike a partnership or LLC, each TIC owner holds title in their own name to their fractional interest (such as 25% of an apartment building or 10% of a commercial office). Each owner receives their share of income and expenses, files their own Schedule E, and — critically — can independently 1031 exchange their share without affecting other owners.

The TIC structure was popularized by IRS Revenue Procedure 2002-22, which created a safe harbor distinguishing TIC ownership from partnerships. Up to 35 TIC owners are permitted per property. The 2002-22 safe harbor requires that each owner can sell or 1031 exchange independently, that decisions about leasing and refinancing be unanimous, that no business activity occur beyond customary property management, and that ownership interests be issued in proportion to capital contributions.

TIC vs partnership LLC — why investors choose TIC

The single biggest advantage of TIC over a partnership LLC is independent 1031 exchange eligibility. In a partnership, the partnership itself is the property owner, and individual partners cannot 1031 exchange their LLC interests (a partnership interest is not "like-kind" to real estate). In a TIC, each owner can sell their fractional interest and 1031 exchange into a new property without affecting the other TIC owners. This makes TIC the preferred structure for groups of investors wanting flexibility on exit.

The trade-offs: TIC requires unanimous consent for major decisions (selling the entire property, refinancing, signing a lease over 3 years), which can cause deadlock. Banks often require a TIC agreement and may not lend on properties with more than a few TIC owners. TIC owners are jointly and severally liable for the mortgage (each is personally responsible for the full loan), which is far more risky than LLC limited liability.

TIC and DST — closely related structures

A Delaware Statutory Trust (DST) is a related structure that addresses TIC's deadlock and liability problems. In a DST, a sponsor manages the property and investors hold beneficial interests (not direct title). DSTs qualify as 1031 replacement property under Rev. Rul. 2004-86 and allow up to 499 investors per property (vs 35 for TIC). However, DST investors have no decision-making rights and cannot independently 1031 exchange before the sponsor sells.

TIC offers more control with deadlock risk. DST offers more passivity with no control. Many 1031 exchangers use TIC for flexibility during the hold and DST as a fallback "parking" 1031 replacement when they can't find a direct property in time. This calculator focuses on TIC mechanics — see our DST calculator for that structure.

Sources: IRS Rev. Proc. 2002-22 (TIC safe harbor), IRS Rev. Rul. 2004-86 (DST as 1031 replacement), NAR.realtor TIC guides, BiggerPockets TIC vs LLC structuring, IRS Publication 527 (Residential Rental Property). Last updated: May 2026.