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1031 TIC Ownership Calculator
Buying into a shared property with partners to complete your exchange? Enter what you must replace and reinvest, plus the deal's price and financing, and get the exact tenants-in-common ownership percentage that fully defers your tax — with your cash, debt, and closing-cost share broken out. Free, no signup.
Your exchange requirements
The two numbers your sale locks in. To fully defer, you must replace at least this much value and reinvest all of this cash.
Net sale price of what you sold
Your equity proceeds at the QI
The shared property (TIC)
The larger property you and your partners want to co-own as tenants-in-common. You'll buy an undivided percentage of it.
Equity: $1,200,000
Split pro-rata across owners
Minimum ownership to fully defer
33.3%
Buy at least this share and your cash is fully deployed with no taxable boot.
Your slice at 33.3%
- Value you acquire
- $1,000,000
- Cash into the deal
- $400,000
- Loan you take on
- $600,000
- Your share of closing costs
- $20,000
Your $400,000 in exchange proceeds is deployed in full — no cash left sitting at the QI to be taxed. Plus your $20,000 share of closing costs.
Which requirement set the floor
Your minimum ownership is the larger of two fractions: $900,000 ÷ $3,000,000 = 30% to match your replacement value, and $400,000 ÷ $1,200,000 = 33.3% to deploy all your cash. Cash is the binding constraint here, so you own 33.3%. Sizing to the larger fraction is what keeps the exchange 100% tax-deferred — buy below it and the gap becomes taxable boot.
Why exchangers buy fractions instead of whole properties
A 1031 exchange has two unforgiving requirements: buy replacement property worth at least what you sold, and reinvest every dollar of your proceeds. The trouble is that whole properties come in whole-property sizes. If you netted $900,000 of value and $400,000 of cash to reinvest, the odds that a single building on the market matches both numbers are slim — buy too small and the difference is taxed as boot.
A tenants-in-common interest removes the rounding problem. Instead of one whole property, you buy an undivided percentage of a larger one — sized to the dollar. Because ownership scales continuously, you can land exactly on the value and cash you need to fully defer. That's the insight behind co-ownership deals: flexibility to hit an exact target that a single property can't.
The two constraints, and why you take the larger
Your minimum ownership percentage is whichever of these two fractions is bigger:
Value test
your value you must replace ÷ property price
Own enough that your share's value meets or beats what you sold. Fall short and you've "bought down" — taxable.
Cash test
cash to reinvest ÷ property equity
Own enough that your share of the equity absorbs all your proceeds. Leave cash behind and it's boot.
Take the larger fraction and both tests are satisfied at once. If the value test binds, your equity share exceeds your proceeds and you top it up with your own cash — which is never taxed. If the cash test binds, your proceeds are deployed exactly. The calculator tells you which one is driving your number.
Keep it a co-ownership, not a partnership
One caution the math can't show you: a partnership interest does not qualify for 1031. If your co-ownership looks and behaves like a partnership, the IRS can recharacterize it and your exchange fails. Revenue Procedure 2002-22 is the guide to staying on the right side — generally no more than 35 co-owners, each holding direct title, sharing revenue and costs strictly pro-rata, with major decisions requiring unanimous consent and activities limited to ordinary rental operation. Structure the deal with a qualified intermediary and a real estate attorney before you commit.
Sizing up a replacement property?
WhoseTitle maps every owner in a neighborhood from public county records — with equity and tenure signals — so you can find and approach the right property before your 45-day clock runs out.
1031 TIC FAQs
What is a tenants-in-common (TIC) interest in a 1031 exchange?
A TIC interest is an undivided fractional ownership of real property — you own a percentage of the whole, hold direct title, and share income and expenses pro-rata. In a 1031 exchange it solves a common problem: no single whole property matches the exact value and cash you must reinvest. Buying a right-sized slice of a larger property lets you hit your numbers precisely. Properly structured TIC interests qualify as like-kind replacement property under IRS Revenue Procedure 2002-22.
How much of the property do I need to own?
Enough to satisfy both 1031 requirements: your share of the value must be at least the value you're replacing, and your share of the equity must absorb all of your cash proceeds. The calculator takes the larger of those two fractions — that's your minimum ownership percentage to fully defer. Below it, the gap becomes taxable boot.
What is boot, and how does a TIC interest avoid it?
Boot is any value you receive that isn't like-kind replacement property, and it's taxable up to the amount of your gain. Cash boot is leftover proceeds you didn't reinvest; mortgage boot is taking on less debt than you paid off without offsetting it with cash. Because a TIC interest scales continuously, you can dial your ownership percentage to exactly consume your proceeds and match your value — leaving no boot. Adding your own cash on top is never boot.
Isn't a TIC just a partnership, which doesn't qualify?
It can't be — partnership interests are specifically excluded from 1031. That's why Revenue Procedure 2002-22 matters: it lays out the conditions (no more than 35 co-owners, direct title held by each owner, pro-rata sharing of revenue and costs, unanimous consent for major decisions, activities limited to normal rental operation) under which the IRS treats a co-ownership as like-kind real estate rather than a partnership. Modern syndicated TIC offerings are structured to comply. Work with a qualified intermediary and attorney to keep it on the right side of the line.
Do all the co-owners have to be doing exchanges?
No. A TIC property can mix exchangers and ordinary cash buyers — each owner's tax situation is their own. What matters for you is that your slice satisfies your exchange requirements. The calculator sizes your interest independently of what your partners are doing.
General information, not tax or legal advice. TIC structuring for 1031 exchanges is governed by IRS Revenue Procedure 2002-22 and is easy to get wrong — always work with a qualified intermediary and a real estate attorney.