When real property located in California is exchanged (1031 exchange) for property located outside California, the gain realized from the California property that is deferred under section 1031 remains a source of California taxable gain on the sale of the second property . Didn’t know this? Neither did many exchangers of California property, with the consequence that all too … [Read more...] about California to require annual reporting following like-kind exchanges of out-of-state property