Internal Revenue Code · 26 U.S.C.

§ 1043. Sale of property to comply with conflict-of-interest requirements

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 1043

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status: In force
Added: November 30, 1989 by Pub. L. 101–194
Last amended: December 20, 2006 by Pub. L. 109–432
Amendments: 3 dated changes in the source credit
Length: 3 subsections · 648 words · about 3 min to read
Defines: 4 terms
Cross-references: cites 1; cited by 3 Code sections and 0 other regulations

¶(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).

(Added Pub. L. 101–194, title V, § 502(a), Nov. 30, 1989, 103 Stat. 1754; amended Pub. L. 101–280, § 6(a)(1), May 4, 1990, 104 Stat. 160; Pub. L. 101–508, title XI, § 11703(a)(1), Nov. 5, 1990, 104 Stat. 1388–516; Pub. L. 109–432, div. A, title IV, § 418(a), (b), Dec. 20, 2006, 120 Stat. 2966.)

Terms defined here

Where the text says “the term … means”. Select a term to jump to its definition.

certificate of divestiture § 1043(b)(2)
eligible person § 1043(b)(1)
judicial officer § 1043(b)(6)
permitted property § 1043(b)(3)

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

§ 1012 Basis of property—cost

Cited by 3 Code sections

Amendment history

From the source credit and the official notes, newest first.

December 20, 2006Amended by Pub. L. 109–432Parts changed in 2006: (b)(1)(A) (b)(1)(B) (b)(2)(B) (b)(5)(B) (b)(6)
November 5, 1990Amended by Pub. L. 101–508Parts changed in 1990: (a) (b)(5)
May 4, 1990Amended by Pub. L. 101–280
November 30, 1989Added by Pub. L. 101–194

Where it sits in the Code

Nearby sections

§ 1039 Repealed
§ 1040 Transfer of certain farm, etc., real property
§ 1041 Transfers of property between spouses or incident to divorce
§ 1042 Sales of stock to employee stock ownership plans or certain cooperatives
§ 1043 Sale of property to comply with conflict-of-interest requirements
§ 1044 Repealed
§ 1045 Rollover of gain from qualified small business stock to another qualified small business stock

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Amendments

2006—Subsec. (b)(1)(A). Pub. L. 109–432, § 418(a)(1)(A), inserted “, or a judicial officer,” after “executive branch”.

Subsec. (b)(1)(B), (2)(A). Pub. L. 109–432, § 418(a)(1)(B), (2)(A), inserted “judicial canon,” after “rule,”.

Subsec. (b)(2)(B). Pub. L. 109–432, § 418(a)(2)(B), inserted “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,” after “Ethics,”.

Subsec. (b)(5)(B). Pub. L. 109–432, § 418(a)(3), inserted “judicial canon,” after “rule,”.

Subsec. (b)(6). Pub. L. 109–432, § 418(b), added par. (6).

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 2006 Amendment

Pub. L. 109–432, div. A, title IV, § 418(c), Dec. 20, 2006, 120 Stat. 2967, provided that: “The amendments made by this section [amending this section] shall apply to sales after the date of enactment of this Act [Dec. 20, 2006].”

Effective Date of 1990 Amendment

Pub. L. 101–508, title XI, § 11703(a)(2), Nov. 5, 1990, 104 Stat. 1388–517, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to sales after November 30, 1989.”

Pub. L. 101–280, § 6(a)(3), May 4, 1990, 104 Stat. 160, 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

Pub. L. 101–280, § 6(a)(2), May 4, 1990, 104 Stat. 160, 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.”