Section 1031 of the Internal Revenue Code permits investors to defer some or all of the taxable gain that would ordinarily be due on the sale of a property if they exchange for "like-kind" property. In order to avoid income taxes, many investors attempted to make use of this tax code when disposing of commercial real estate assets. This led to the reemergence of which of the following forms of ownership in commercial real estate?

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Section 1031 exchanges have led to a resurgence in the use of tenancy-in-common ownership in commercial real estate. With this form of ownership, multiple investors hold fractional interests in the property, enabling them to exchange their shares for "like-kind" property without triggering taxable gains. This allows investors to achieve greater diversification and flexibility in their real estate holdings, and may also provide additional tax benefits through depreciation deductions and the ability to offset gains and losses across multiple properties. The other options, while still used in commercial real estate, are not specifically associated with the use of Section 1031 exchanges.

Section 1031 of the Internal Revenue Code Permits Investors to Defer