Well, California is watching you would be 1031 Exchangers. And, they are really cracking down if you're not following it to the T letter of the Tax Exchange law.
So, while it's a great way to defer tax payments, be careful. Make sure you are doing everything as legally as you are supposed to. Utilize a 1031 expert to complete the exchange for you.
Since California pretty much follows the Federal guidelines on 1031's, read here from the IRS: