Capital gains/T.I.C.

[eagerseller]

What is the name of your state? CA

I'm an owner of a T.I.C. (tenancy in common) in San Francisco. I've owned 1 of 3 units for less than 2 years. Last September I went off title because of low credit scores so my partners could refinance. I transferred my interest to one of the partners. We've just obtained financing, or they have rather, and I am still off title.

I am wanting to sell my unit to a new party, but I'd like to remain off title. I have read that often times, capital gains taxes can be avoided for TIC owners. If I remain off title, what will be the tax consequences for either us? Or, if I must go back on title, will I have capital gains tax? I've owned less than 2 years, and will make a sizeable profit.

 

[divgradcurl]

I have read that often times, capital gains taxes can be avoided for TIC owners.

Where did you read that?

If I remain off title, what will be the tax consequences for either us?

I don't understand -- if you are not on the title, you don't own anything. If you don't have a title to the property, you have nothing to sell. Maybe you can explain your situation a little more thoroughly -- when you said that you transfered your interest, do you mean you quit claimed your deed to the other tenants, or what?

 

[eagerseller]

Originally, I transferred the interest so that I would not show up on title & would avoid further financing complications. The other 2 owners had to obtain financing without me. I was only going to be off for 2 months, then the title company said I'd just go right back on as soon as I was ready. Well, financing took until May to get completed.

I still pay my mortgage & taxes to the TIC group. Yes, I believe it was a quick claim deed. Essentially, the partners would be selling my unit since they are the one's on title, but there's no question with the group that I'm the owner & that I'll receive the proceeds from the sale. There'll just have to be a demand for payment to me at the close of escrow.

So I'm uncertain of the tax consequences.

 

[abezon]

Have them put you back on the title so that you meet the 2 year test. (I assume we're talking about your primary residence here, as otherwise your question makes no sense.)