We have a lot of California investors buying Texas properties, but someone mentioned that CA investors can be taxed on the gain when they later sell their TX property.
http://www.realestatejournal.com/columnists_com/buildingvalueqa/20031001-smith.html
“…things get more complicated when it involves an exchange with relinquished and replacement properties in different states, Mr. Weller points out. In Georgia, deferral of taxes on gains from a property sale is possible in a 1031 exchange only when the replacement property is located in Georgia. In California and Oregon, if in-state property is exchanged for out-of-state replacement property, a future sale of the replacement property can trigger an obligation to pay the state tax deferred on the original exchange.”
Is this true?