This alert is an update on the development of California State Assembly Bill 2640 (“AB 2640”) relating to Section 1031 Exchanges. Section 1031 Exchanges allow taxpayers to defer recognition of gain or loss from exchanges of like-kind property. Additionally, AB 2640 also proposed to repeal the non-recognition of gain or loss resulting from involuntary conversions, seller re-acquisitions of real property and transfer of property between spouses.