SIE Understanding Products and Their Risks Practice Question 75

Correct Answer: D

Explanation:

D: Choice D is correct because the IRS code requires that the TIC transaction be completed by the earlier of the following 180 days after the initial sale, or by the last date for filing an income tax return for the year in which the transaction occurred. Choice A is incorrect because a limited partner's ownership is not required to be a certain amount. However, the general partner must provide at least one percent of the capital. Choice B is incorrect because in a limited partnership, only the general partner assumes obligation for a loan. In a TIC transaction, each participant signs every mortgage. Each TIC transaction is unique, and in some cases a mortgage company could require a personal obligation in case specific types of actions are taken, such as illegal behavior by the participants. Choice C is incorrect because the IRS code allows the entire financial results to flow through to the participants.