Internal Revenue Code:Sec. 1043. Sale of property to comply with conflict-of-interest requirements

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter O - Gain or Loss on Disposition of Property
         PART III - COMMON NONTAXABLE EXCHANGES
       

Statute

    Sec. 1043. Sale of property to comply with conflict-of-interest
        requirements
 
    (a) Nonrecognition of gain
      If an eligible person sells any property pursuant to a
    certificate of divestiture, at the election of the taxpayer, gain
    from such sale shall be recognized only to the extent that the
    amount realized on such sale exceeds the cost (to the extent not
    previously taken into account under this subsection) of any
    permitted property purchased by the taxpayer during the 60-day
    period beginning on the date of such sale.
    (b) Definitions
      For purposes of this section -
      (1) Eligible person
        The term ''eligible person'' means -
          (A) an officer or employee of the executive branch, or a 
        judicial officer, of the Federal Government, but does not 
        mean a special Government employee as defined in section 202 
        of title 18, United States Code, and
          (B) any spouse or minor or dependent child whose ownership of
        any property is attributable under any statute, regulation,
        rule, judicial canon, or executive order referred to in 
        paragraph (2) to a person referred to in subparagraph (A).
      (2) Certificate of divestiture
        The term ''certificate of divestiture'' means any written
      determination -
          (A) that states that divestiture of specific property is
        reasonably necessary to comply with any Federal conflict of
        interest statute, regulation, rule, judicial canon, or 
        executive order (including section 208 of title 18, United 
        States Code), or requested by a congressional committee as 
        a condition of confirmation,
          (B) that has been issued by the President or the Director of
        the Office of Government Ethics, in the case of executive 
        branch officers or employees, or by the Judicial Conference 
        of the United States (or its designee), in the case of judicial 
        officers, and
          (C) that identifies the specific property to be divested.
      (3) Permitted property
        The term ''permitted property'' means any obligation of the
      United States or any diversified investment fund approved by
      regulations issued by the Office of Government Ethics.
      (4) Purchase
        The taxpayer shall be considered to have purchased any
      permitted property if, but for subsection (c), the unadjusted
      basis of such property would be its cost within the meaning of
      section 1012.
      (5) Special rule for trusts
        For purposes of this section, the trustee of a trust shall be
      treated as an eligible person with respect to property which is
      held in the trust if -
          (A) any person referred to in paragraph (1)(A) has a
        beneficial interest in the principal or income of the trust, or
          (B) any person referred to in paragraph (1)(B) has a
        beneficial interest in the principal or income of the trust and
        such interest is attributable under any statute, regulation,
        rule, judicial canon, or executive order referred to in paragraph
        (2) to a person referred to in paragraph (1)(A).
      (6) Judicial officer.--The term `judicial officer' means 
        the Chief Justice of the United States, the Associate Justices 
      of the Supreme Court, and the judges of the United States courts 
      of appeals, United States district courts, including the 
      district courts in Guam, the Northern Mariana Islands, and the 
      Virgin Islands, Court of Appeals for the Federal Circuit, Court 
      of International Trade, Tax Court, Court of Federal
      Claims, Court of Appeals for Veterans Claims, United States 
      Court of Appeals for the Armed Forces, and any court created by 
      Act of Congress, the judges of which are entitled to hold office 
      during good behavior.
    (c) Basis adjustments
      If gain from the sale of any property is not recognized by reason
    of subsection (a), such gain shall be applied to reduce (in the
    order acquired) the basis for determining gain or loss of any
    permitted property which is purchased by the taxpayer during the
    60-day period described in subsection (a).
 

Sources

    (Added Pub. L. 101-194, title V, Sec. 502(a), Nov. 30, 1989, 103
    Stat. 1754; amended Pub. L. 101-280, Sec. 6(a)(1), May 4, 1990, 104
    Stat. 160; Pub. L. 101-508, title XI, Sec. 11703(a)(1), Nov. 5,
    1990, 104 Stat. 1388-516.)
 

Miscellaneous

                                 AMENDMENTS

2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 418. SALE OF PROPERTY BY JUDICIAL OFFICERS.
    (a) In General.--Section 1043(b) (relating to the sale of property 
to comply with conflict-of-interest requirements) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by inserting ``, or a 
                judicial officer,'' after ``an officer or employee of 
                the executive branch''; and
                    (B) in subparagraph (B), by inserting ``judicial 
                canon,'' after ``any statute, regulation, rule,'';
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by inserting ``judicial 
                canon,'' after ``any Federal conflict of interest 
                statute, regulation, rule,''; and
                    (B) in subparagraph (B), by inserting after ``the 
                Director of the Office of Government Ethics,'' the 
                following: ``in the case of executive branch officers or 
                employees, or by the Judicial Conference of the United 
                States (or its designee), in the case of judicial 
                officers,''; and
            (3) in paragraph (5)(B), by inserting ``judicial canon,'' 
        after ``any statute, regulation, rule,''.
    (b) Judicial Officer Defined.--Section 1043(b) is amended by adding 
at the end the following new paragraph:
            ``(6) Judicial officer.--The term `judicial officer' means 
        the Chief Justice of the United States, the Associate Justices 
        of the Supreme Court, and the judges of the United States courts 
        of appeals, United States district courts, including the 
        district courts in Guam, the Northern Mariana Islands, and the 
        Virgin Islands, Court of Appeals for the Federal Circuit, Court 
        of International Trade, Tax Court, Court of Federal
        Claims, Court of Appeals for Veterans Claims, United States 
        Court of Appeals for the Armed Forces, and any court created by 
        Act of Congress, the judges of which are entitled to hold office 
        during good behavior.''.

      1990 - Subsec. (a). Pub. L. 101-508 substituted ''to the extent
    not previously taken into account under this subsection'' for
    ''reduced by any basis adjustment under subsection (c) attributable
    to a prior sale''.
      Subsec. (b)(5). Pub. L. 101-280 added par. (5).

                     EFFECTIVE DATE OF 1990 AMENDMENTS
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 418(c) Effective Date.--The <<NOTE: 26 USC 1043 note.>> amendments made 
by this section shall apply to sales after the date of enactment of this 
Act.

                     EFFECTIVE DATE OF 1990 AMENDMENTS
      Section 11703(a)(2) of Pub. L. 101-508 provided that: ''The
    amendment made by paragraph (1) (amending this section) shall apply
    to sales after November 30, 1989.''
      Section 6(a)(3) of Pub. L. 101-280 provided that: ''The amendment
    made by paragraph (1) (amending this section) and the provisions of
    paragraph (2) (set out below) shall apply to sales after November
    30, 1989.''
                               EFFECTIVE DATE
      Section applicable to sales after Nov. 30, 1989, see section
    502(c) of Pub. L. 101-194, set out as an Effective Date of 1989
    Amendment note under section 1016 of this title.
                     PROPERTY SOLD BEFORE JUNE 19, 1990
      Section 6(a)(2) of Pub. L. 101-280 provided that:
      ''(A) For purposes of section 1043 of such Code -
        ''(i) any property sold before June 19, 1990, shall be treated
      as sold pursuant to a certificate of divestiture (as defined in
      subsection (b)(2) thereof) if such a certificate is issued with
      respect to such sale before such date, and
        ''(ii) in any such case, the 60-day period referred to in
      subsection (a) thereof shall not expire before the end of the
      60-day period beginning on the date on which the certificate of
      divestiture was issued.
      ''(B) Notwithstanding subparagraph (A), section 1043 of such Code
    shall not apply to any sale before April 19, 1990, unless -
        ''(i) the sale was made in order to comply with an ethics
      agreement or pursuant to specific direction from the appropriate
      agency or confirming committee, and
        ''(ii) the justification for the sale meets the criteria set
      forth in subsection (b)(2)(A) thereof as implemented by the
      interim regulations implementing such section 1043, published on
      April 18, 1990.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 1016, 1223 of this title.