Page:United States Statutes at Large Volume 103 Part 2.djvu/744

 103 STAT. 1754 PUBLIC LAW 101-194—NOV. 30, 1989 Accounting Office to conduct factfinding and an investigation into the matter. The Office of Special Investigations shall promptly investigate the matter as directed by the committee. Taxes. SEC. 502. NONRECOGNITION FOR CERTAIN SALES TO COMPLY WITH CONFLICT-OF-INTEREST REQUIREMENTS. (a) GENERAL RULE. — Part III of subchapter O of chapter 1 of the Internal Revenue Code of 1986 (relating to common nontaxable exchanges) is amended by adding at the end thereof the following new section: "SEC. 1043. SALE OF PROPERTY TO COMPLY WITH CONFLICT-OF- INTEREST REQUIREMENTS. "(a) NoNRECOGNinoN OF GAIN.— I f 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 (reduced by any basis adjustment under subsection (c) attributable to a prior sale) 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) EuGiBLE PERSON. — The term 'eligible person' means— "(A) an officer or employee of the executive branch of the Federal Government, but does not mean a special Govern- ment 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 stat- ute, regulation, rule, or executive order referred to in para- graph (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, or executive order (includ ing section 208 of title 18, United States Code), or requested by a congressional committee as a condition of confirma- tion, "(B) that has been issued by the President or the Director of the Office of Government Ethics, 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 teixpayer 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. "(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).". (b) TECHNICAL AMENDMENTS. — (1) Section 1223 of such Code (relating to holding period of property) is amended by redesignating paragraph (14) as para-

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