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Tenancy in Common arrangements involve the investment by multiple owners in business properties for a profit. This allows more than one investor to own an undivided fractional ownership of investment property. For Section 1031 purposes, each owner may independently purchase and/or sell an interest in the property as either replacement property or relinquished property without regard to the intent of the other owners. This option permits investors to invest with other investors forming a tax partnership and being subject to Chapter K of the tax code. Investors and advisors familiar with like-kind exchanges know that lack of consensus among the partners on the sale and reinvestment of sale proceeds is the primary obstacle to performing section 1031 exchanges with partnerships.
That being said, a tenancy in common arrangement needs to avoid characteristics that would cause it to be treated as a tax partnership.