[PAOKE]

I had an existing 30A breaker with 10-3 wire. I capped the red wire on both ends and replaced the 30A breaker with a 20A beaker. At the end of the run (nothing else is tied to this wire/breaker), I want to connect 12-2 wire. Is there anything wrong with doing this? I understand that it is not best practice, but is there anything unsafe or against code
With this scenario?

[hfcarson]

Paoke,
Acutally you are permitted to connect #12 AWG conductors "and Larger" to a 20 ampere circuit breaker.
This is done frequently to reduce voltage drop across large distances, so it's not only a permitted practice but a common one, assuming of course the rest of your work is code compliant!

[tkrussell]

Yes, you can extend the circuit with #12 wire and protect it with a 20 amp breaker. Be sure to label the #10 wire in the panel to warn that there is #12 wire in the circuit and the max breaker allowed to protect that circuit is 20 amp.