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Sales of Property to Comply With Conflict-of-Interest Requirements: Section 1043 Assumes New Significance  

Author:  Erik M. Jensen.

Source: Volume 34, Number 03, Spring 2017 , pp.3-14(12)

Journal of Taxation of Investments

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After the recent presidential election, Section 1043 of the Internal Revenue Code has received both public visibility and substantial criticism. The section permits certain public officials to defer gain on the sale of assets required to satisfy conflict-of-interest rules, a benefit of sorts characterized by critics as an unwarranted giveaway to the wealthy. This article examines the particulars of Section 1043 and generally defends the way it works. The article also considers whether Section 1043 can be availed of by a President of the United States who divests appreciated assets because of conflict-of-interest concerns, concluding (perhaps surprisingly) that the statutory language doesn’t seem to apply to the president.

Keywords: IRC Sec. 1043, conflicts of interest, Foreign Emoluments Clause, divesting assets, gain deferral

Affiliations:  1: Case Western Reserve University School of Law.

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