Rev. Proc. 2002-22: Tenants in Common
Real Estate can be owned by a multi-member LLC, a partnership or as a tenant in common in addition to other ways of holding title. Under Section 1031 of the IRS Code, a member of an LLC or a partner of a partnership cannot do an exchange of the membership or partnership interest. A tenant in common can sell or acquire a tenant in common interest as part of an exchange. However, holding ownership of a tenant in common but acting more like a partnership can cause the IRS to treat the relationship as a partnership. Rev. Proc. 2002-22 has been provided by the IRS to enable persons to know how to keep the relationship as a true tenancy in common and not a deemed partnership.