Yes, and tenancy in common is one of the cleanest structures for it. A TIC co-owner holds an undivided fractional interest in the whole property and reports their share of income and depreciation directly on their own return. Rev. Proc. 2002-22 lists the conditions under which the IRS will treat that co-ownership as direct property ownership rather than a partnership, which is also why TIC interests can work in 1031 exchanges.
One study, many owners
Cost segregation analyzes the building, so a single study covers all co-owners. Each owner applies their ownership percentage to the reclassified 5, 7, and 15 year MACRS amounts under IRS Pub 946. Splitting the study cost across co-owners also improves the economics on properties that would be marginal for a single owner.
Each co-owner is a separate taxpayer
This is the part that surprises people. Because a true TIC is not a partnership, depreciation decisions are made owner by owner:
- One co-owner can claim bonus depreciation under IRC section 168(k) while another elects out under IRC 168(k)(7) on their own return.
- Bonus rates can differ. An owner who acquired their interest after January 19, 2025 gets the permanent 100% rate under the One Big Beautiful Bill Act; an owner who acquired on or before that date is on the phase-down, which lands at 40% for 2025 placements, 60% for 2024, and 80% for 2023.
- Basis differs when owners bought in at different times and prices, so the same percentage interest can produce different deductions.
- A look-back works per owner: a co-owner who under-depreciated in prior years files their own Form 3115 and takes their own section 481(a) catch-up, per the Form 3115 instructions, without touching anyone else's return.
Watch the partnership line
The direct-ownership treatment holds only while the arrangement looks like co-ownership. Shared business operations beyond customary rental services can push the group into partnership territory, and Rev. Proc. 2002-22 is the IRS's map of where that line sits. If the TIC is in substance a partnership, the study and all elections move to the entity level and flow out on K-1s, the way a syndication works.
State and exit treatment
Each co-owner handles the property state's rules for their own share: nonresident filings where required, and bonus addbacks in states that decouple from IRC 168(k). At sale, each owner recognizes their share of section 1245 ordinary recapture on short-life property and unrecaptured section 1250 gain on the building at up to 25%, measured against their own depreciation history.
Where Amadae fits
Amadae screens the property, models each co-owner's share with their own acquisition date, bonus rate, and basis, prepares per-owner Form 3115 filings when a look-back applies, and files the returns. The screen is an estimate used to decide whether a full engineering study is worth ordering; Amadae coordinates with engineering study firms rather than performing studies itself.