Which remedy involves the employee selling assets to comply with ethics program requirements and provides for deferral of capital gains taxes?

Which remedy involves the employee selling assets to comply with ethics program requirements and provides for deferral of capital gains taxes?

• A. Waiver
• B. Certificate of Divestiture
• C. Blind Trust
• D. Misuse of Position

Answer: (B)

When an ethics issue involves a financial interest that could conflict with official duties, the action to remove that conflict is to divest the related assets. The Certificate of Divestiture is the formal remedy that confirms the asset sale has occurred to bring the employee into compliance with the ethics program. A key feature of this remedy is the potential deferral of capital gains taxes on the sale, which eases the financial impact while the individual satisfies the ethics requirements and continues in their role. This combination—disposing of the disqualifying asset and receiving tax relief—is why this option best fits the scenario. A waiver is about permission to continue with the current holdings under restrictions, not about selling assets or deferring taxes. A blind trust shifts control of assets away from the employee but doesn’t necessarily involve selling to meet ethics requirements or provide tax deferral. Misuse of Position is a prohibited behavior, not a corrective action or remedy used to resolve conflicts of interest.

When an ethics issue involves a financial interest that could conflict with official duties, the action to remove that conflict is to divest the related assets. The Certificate of Divestiture is the formal remedy that confirms the asset sale has occurred to bring the employee into compliance with the ethics program. A key feature of this remedy is the potential deferral of capital gains taxes on the sale, which eases the financial impact while the individual satisfies the ethics requirements and continues in their role. This combination—disposing of the disqualifying asset and receiving tax relief—is why this option best fits the scenario.

A waiver is about permission to continue with the current holdings under restrictions, not about selling assets or deferring taxes. A blind trust shifts control of assets away from the employee but doesn’t necessarily involve selling to meet ethics requirements or provide tax deferral. Misuse of Position is a prohibited behavior, not a corrective action or remedy used to resolve conflicts of interest.