Thanks for sending me your Tee-Shots. The recent Private Letter Ruling regarding exchanging with oneself triggered a thought. I have a client who earlier this year bought a small shopping center taking title in his name without the thought of a reverse exchange. Now several months later he has a sale of a building which would have worked well as an exchange. My reading is that the property he bought should have been titled in someone else's name and designated as a reverse exchange. Is there anything he can do now to make it a tax-deferred exchange? Sol Schwartz Sol Schwartz & Associates www.ssacpa.com

Dear Mr. Schwartz,

Thank you for your question. Unfortunately, in the situation you described, we do not see any way that your client could incorporate the shopping center into an exchange. You are correct that it could have been made part of an exchange for your client's sale property, but we would have had to buy the shopping center in advance and hold it for your client. The recent Private Letter Ruling does allow something very similar to "exchanging with oneself" as you put it, but the application of the PLR is pretty limited. Specifically, it works if your client has bare land and wants to build improvements upon that land using exchange funds. But a completed property like the shopping center you describe is a different story.  In truth, the PLR allows something different than exchanging with yourself (albeit the difference is just technicalities) -- truly exchanging with yourself is still not really allowed.

I hope this explanation makes sense.  If you need further clarification, please e-mail or call us directly and we'd be happy to give you more information.

Best Regards,

The 1031 Exchange Experts