Are Recoveries for Losses Taxable? The Commissioner’s Nonacquiescence in Cosentino Muddies the Waters
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.
Section 1043, conflicts of interest, Foreign Emoluments Clause, divesting assets
35(1) Journal of Taxation of Investments 47 (2017)