26 U.S.C. § 1043

Sale of property to comply with conflict-of-interest requirements

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(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) DefinitionsFor purposes of this section—(1) Eligible personThe 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 divestitureThe 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 trustsFor 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.

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.)Editorial NotesAmendments

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).

Statutory Notes and Related SubsidiariesEffective 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.”

Notes of Decisions

Cited in 13 cases (1 in the last 5 years), 1936–2022 · leading case: United States v. Alfonso Adalberto Pupo, United States of Am. v. George Govantes, 841 F.2d 1235 (4th Cir. 1988).

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United States v. Alfonso Adalberto Pupo, United States of Am. v. George Govantes, 841 F.2d 1235 (4th Cir. 1988). “There, the defendant was charged with unregistered retail distribution of opium under former 26 U.S.C. § 1043 , which prohibited the purchase or sale of specified drugs “except in the original stamped package or from the original stamped package.”

Mullaney v. United States, 82 F.2d 638 (9th Cir. 1936). · cites it 2× “§ 692 (now 26 U.S.C.A. § 1043 ), and 21 U.S.C.A. § 174 , the statutes upon which the indictment is based, are invalid.”

Lambert v. United States, 101 F.2d 960 (5th Cir. 1939). · cites it 2× “The effect of the finding of a conspiracy between appellant and Christian is no more than to find him guilty of two conspiracies, both of which might have been charged against him, it being unlawful to purchase as well as to sell such drugs.”

Beland v. United States, 100 F.2d 289 (5th Cir. 1938). “Under the Harrison Anti-Narcotic Act, 26 U.S.C.A. § 1043 (a), evidence that no revenue tax stamps were affixed to the drugs at the time of their delivery is prima facie evidence that the same were not sold in or from original stamped packages.”

United States v. Delroy Anthony McLean, 891 F.3d 1308 (11th Cir. 2018). “§ 3156 (a) -(b) ; 26 U.S.C. § 1043 (b)(6) ; 28 U.S.C. § 482 .”

United States v. Harris, 26 F. Supp. 788 (S.D. Cal. 1939). · cites it 2× “§ 692 , now 26 U.S.C.A. § 1043 ) and the Jones-Miller Act ( 21 U.”

Yep v. United States, 81 F.2d 637 (10th Cir. 1936). “Yep and Luie Ben Seung were charged by an indictment containing eight counts with violation of 26 U.S.C.A. §§ 1043 , 1044 and 21 U.S.C.A.”

United States v. Platt, 31 F. Supp. 788 (S.D. Tex. 1940). “692, 26 U.S.C.A. § 1043 ) provides that the absence of the required tax stamp from any of said drugs “shall be prima facie evidence of a violation *792 of this section [subsection] by the person in whose possession same may be found.”

Divestiture of Stock & Purchase of Gov't Bonds by an Incoming Sec'y of the Treasury (OLC 2006). · cites it 15× “Divestiture of Stock and Purchase of Government Bonds by an Incoming Secretary of the Treasury The incoming Secretary of the Treasury may purchase government bonds with the proceeds of a stock sale pursuant to a certificate of divestiture properly issued under 26 U.S.C. § 1043…”

Aderhold v. Ashlock, 99 F.2d 67 (10th Cir. 1938). “§ 692 , now 26 U.S.C.A. § 1043 . He pleaded guilty and was sentenced to a term of imprisonment of two years from November 13, 1933.”

Adams v. Clark, 100 F.2d 135 (9th Cir. 1938). “On January 12, 1938, an indictment was returned in the United States District Court for Nevada, charging that Charles Cheney, „ Roxie Cheney, Eugene Cheney, Phil Rubin, and Ruth Adams (who is the appellant here) conspired to violate 26 U.S.C.A. § 1043 and 21 ILS.C.A. §§ 173,…”

George D. Prewitt, Jr. v. Denis McDonough (Vet. App. 2022). “26 U.S.C. § 1043 (b)(6). Because this Court is, well, a court and not an agency in the executive branch, it is not subject to the Freedom of Information Act, which defines "agency" as not including "the courts of the United States.”

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