I have discussed Rev. Proc. 2002-22 before here in the context of requirements and form of ownership. What I'm going to do today is discuss the whole thing on the head of a pin:
First, a Tenancy in Common Interest must allow each owner to treat their fractional interest the same as if they owned it individually. I discussed this previously.
>Second, no party OTHER THAN an owner can profit from the operation of a TIC interest (a sponsor of a TIC can't share in the proceeds from running the TIC: if a separate business is there to manage the investment, it is not an interest in real property, but a security, and, as such, ineligible for 1031 exchange treatment.)
The sponsor can sell interests. The sponsor can have brokerage agreement with each investor, separate from the offering, allowing a normal brokerage commitment (with annual cancellation, normally, despite the fact that it will normally need to run for 10 years to get the fee).
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