Supreme Court Upholds Trump-Era Tax on Overseas Income

The Supreme Court on June 20 upheld a 2017 tax on “unrealized” income from overseas investments by a vote of 7–2.

Unrealized income reflects theoretical profits that exist “on paper.” The investor doesn’t “realize” the income until he sells the asset, at which point tax is normally due. In the case at hand, Congress imposed a one-time tax on investors’ share of profits they haven’t yet received.

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.

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