The Moores made a modest investment in India-based KisanKraft, which supplies power tools to small-scale, individual Indian farmers with the aim of helping to make their operations more productive. The Moores had owned KisanKraft shares for more than a decade but never received any income from the shares because the company plowed all its profits back into the business.
But after the MRT was enacted, the Moores received a bill from the IRS for $14,729 for additional income tax they owed, despite having never received any payments from KisanKraft.
Although such profits aren’t ordinarily considered income unless shareholders either receive dividends or sell the shares for a capital gain, the MRT attempts to tax these funds as income by simply declaring them to be taxable income, which is a legal fiction, according to the Competitive Enterprise Institute, which is providing the couple with legal representation.
The Supreme Court Thursday morning upheld by 7–2 a 2017 tax on “unrealized” income from overseas investments.
The court’s opinion in the case was written by Justice Brett Kavanaugh. Justices Neil Gorsuch and Clarence Thomas dissented from the majority opinion.
The court affirmed the Mandatory Repatriation Tax (MRT), also known as the Section 965 transition tax, which was part of the Tax Cuts and Jobs Act approved by the Republican-controlled Congress in 2017 and signed into law by President Donald Trump.
The majority found the tax does not violate the 16th Amendment to the U.S. Constitution.
The Moores made a modest investment in India-based KisanKraft, which supplies power tools to small-scale, individual Indian farmers with the aim of helping to make their operations more productive. The Moores had owned KisanKraft shares for more than a decade but never received any income from the shares because the company plowed all its profits back into the business.
But after the MRT was enacted, the Moores received a bill from the IRS for $14,729 for additional income tax they owed, despite having never received any payments from KisanKraft.
Although such profits aren’t ordinarily considered income unless shareholders either receive dividends or sell the shares for a capital gain, the MRT attempts to tax these funds as income by simply declaring them to be taxable income, which is a legal fiction, according to the Competitive Enterprise Institute, which is providing the couple with legal representation.
The Supreme Court Thursday morning upheld by 7–2 a 2017 tax on “unrealized” income from overseas investments.
The court’s opinion in the case was written by Justice Brett Kavanaugh. Justices Neil Gorsuch and Clarence Thomas dissented from the majority opinion.
The court affirmed the Mandatory Repatriation Tax (MRT), also known as the Section 965 transition tax, which was part of the Tax Cuts and Jobs Act approved by the Republican-controlled Congress in 2017 and signed into law by President Donald Trump.
The majority found the tax does not violate the 16th Amendment to the U.S. Constitution.
(post is archived)