§1043 Sale of Property to Comply with Conflict-of-interest Requirements

Summary

When a covered government official must sell property because a written certificate says it is needed to avoid a conflict of interest, the seller can choose not to count the sale as taxable gain. The only taxable part is any amount received that is more than the cost of allowed investments the seller buys within 60 days after the sale. Any gain that is not counted is then added to reduce the tax basis of the allowed investments bought in that 60-day period, in the order they were bought. Definitions (one line each): Eligible person: certain executive or judicial officers and their spouses or minor/dependent children whose ownership is treated as theirs. Certificate of divestiture: a written order from the President or Office of Government Ethics (for executive branch) or the Judicial Conference (for judges) saying specific property must be sold. Permitted property: U.S. government obligations or approved diversified funds. Purchase: treated as a purchase for tax basis rules. Special rule for trusts: a trustee can be treated as an eligible person when certain beneficiaries are covered. Judicial officer: federal judges, including Supreme Court Justices and other Article III judges.