GLOSSARY OF TERMS - T

Any method to reduce an investor's tax liability. An example would be cost recovery or depreciation used to shelter current income.

Adjusted gross income less personal deductions and exemptions.

A form of co-ownership by which each owner holds an undivided fractional interest in real property as if they were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have right of inheritance. Often used in a 1031 Exchange. When structured as a security TICs are sold by broker dealers, when structured as real estate TICs are sold by licensed real estate brokers. Billions of dollars have been invested in both security and real estate structured TICs. See Revenue Procedure 2002-22.

Separate ownership of property by one person.

A person or entity who has possession of the property though a lease. A tenant also may be referred to as a lessee.

Standard building materials and quantities identified by the landlord which are to be provided at no cost to the tenant to improve tenant premises usually stated as $ per sq. ft.

Portion of tenant improvements paid for by the landlord. Some property owners prefer not to quote improvement allowances; i.e., preferring first to determine what the tenant really needs and then building the space out turnkey (using building standard materials) for the rate quoted. This avoids potentially uncomfortable discussions about disposition of allowance overages/credits.

The companies that package and market TIC properties. They find suitable property, perform the necessary due diligence, arrange financing, oversee sales of TIC interest either as a security or real estate, arranging for property management services, send monthly disbursements to TIC owners, provide periodic summary property reports to owners, manage the disposition of the property and distribution of proceeds.

The total cost (outlay) of necessary tenant improvements paid by the tenant netted against any allowance provided by the landlord.

The minimum number of people or minimum market area or sales volume necessary to sustain a business or make it economically viable.

The principal that a dollar today has greater value than a dollar in the future because of its earning power. See discounted cash flow.

The entity that owns/holds title to property. In an Internal Revenue Code Section 1031 Exchange, the titleholder of the relinquished property must generally be the same as the titleholder of the replacement property. If a Investor dies prior to the acquisition of the replacement property, his or her estate may complete the exchange. When the acquisition and disposition entities bear the same Investor identification numbers, such as disregarded entities (single-member LLC's and Revocable Living Trusts), the exchange usually qualifies.

An article installed by a tenant under the terms of the lease and removable by the tenant before lease expires.