What is Income?

[myrdale]

What is income? It looks like the supreme court may have an answer for us in the near future.

From what I gather, a couple invested $40k in an Indian company back around 2005. Their investment has grown in value, and though they have not taken any money out, they had to pay $15,000 in taxes due to a 2017 law. They want their money back.

This case may affect a lot of stuff, and may result in the tax code being re-written.

[bjl584]

I saw something about this yesterday. Basically it is unrealized versus realized gains.
Congress is given broad power to tax. The Supreme Court may soon narrow the definition of what can be taxed.

[disneysteve]

I have no faith in the current court doing anything right so it will be interesting to see what they decide. I can definitely see this crew trashing 250 years of Constitutional precedent.

[disneysteve]

There's definitely an issue with individuals and corporations being able to shield billions of dollars from taxes by keeping it in offshore accounts. That's really the topic at hand here.

These folks invested 40K in a business that is now worth 500K and claim that they've never taken a dollar of that money out. However, from what I've read, that simply isn't true. A number of times they floated short term loans to the company that got paid back in 60 days at 12% interest. Plus the guy served on the company's board and was reimbursed thousands of dollars for travel expenses so he got to travel back and forth to India on the company's dime, and I'm sure he didn't fly Coach or stay at the Motel 6. So he got plenty of money from the company in return for his investment, and the US taxed it, as they should.

[ua_guy]

Let's see if SCOTUS rules in favor of its sponsors, or if they do justice. I also have little faith in them.

[kork13]

The article I read this morning about all this indicated that SCOTUS seems intent on trying to thread the needle, and resolve the case without totally trashing the century+ legal precedent for broader taxation initially founded in the 16th amendment.

And FWIW, I tend to have more faith in SCOTUS's ability to read the law as "impartially" as it ever has (i.e., to a limited extent), at least alot more than the mainstream media would have anyone believe. Sure, political hotbutton cases that get lots of airtime tend to be decided down "party" lines of conservative/liberal justices. But that's almost always been the case. Most cases are decided more pragmatically. It has always come down to how they individually view the law & legal precedent & how the case is argued. One of the biggest divides philosophically are whether laws should be interpreted as originally written, or if interpretations should account for modern views/applications. They also generally try to write their decisions fairly narrowly so as to minimize impact to other legal precedents.

Did I see in the last couple days that another justice died? Or was that a retired justice who has already stepped down?

[disneysteve]

Sandra Day O’Connor died. She retired in 2005.

[ua_guy]

The article I read this morning about all this indicated that SCOTUS seems intent on trying to thread the needle, and resolve the case without totally trashing the century+ legal precedent for broader taxation initially founded in the 16th amendment.

And FWIW, I tend to have more faith in SCOTUS's ability to read the law as "impartially" as it ever has (i.e., to a limited extent), at least alot more than the mainstream media would have anyone believe. Sure, political hotbutton cases that get lots of airtime tend to be decided down "party" lines of conservative/liberal justices. But that's almost always been the case. Most cases are decided more pragmatically. It has always come down to how they individually view the law & legal precedent & how the case is argued. One of the biggest divides philosophically are whether laws should be interpreted as originally written, or if interpretations should account for modern views/applications. They also generally try to write their decisions fairly narrowly so as to minimize impact to other legal precedents.

Did I see in the last couple days that another justice died? Or was that a retired justice who has already stepped down?

Are the cases decided pragmatically, and are the justices really following legal precedent and the arguments around the cases? Or are the Justices and their opinions bought and sold? No matter which Justice on which issue, I have a problem when it appears they've been potentially influenced in various ways. Kavanaugh's debt magically disappearing before he became a justice. Thomas and basically being given a Marathon coach. Free tuition, club memberships. These are totally normal things for nation-guiding individuals who set legal precedent, right? Uh....

In my job, I can't even accept a token gift from a vendor else it falls under our compliance division's purview for conflict of interest. I would expect SCOTUS to be held to an equal, if not higher standard.

[takekuma]

The whole income definition can get tricky, especially when laws change. Hope the Supreme Court brings some clarity.