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The term tax originally emanated from a Latin word taxo that meant I estimate. It was basically used to impose certain financial charges upon the people or the taxpayers, individuals and even legal entities by a state or any authorized body on condition that anyone that failed to do as per the requirements was subjected to certain form of punishment under the constituted law governing the running of the exercise. Until today, the exercise has achieved great and almost all nations are relying on it as a source of revenue to the states. In the current world, tax can be defined as a responsibility put upon an individual and even the owners of the various properties to give support to their government. The payment of tax is neither voluntary nor a donation but an enforced contribution that is exacted pursuant to any legislative authority by any government in authority. Economists view this exercise as a non-penal but a compulsory transfer of the finances from or resources from the available, private sources to the public sectors using particular criteria without consideration in terms of the income. Taxes can both be paid directly or indirectly and can either be paid in terms of money or labor form that is equivalent. In the olden days, tax was paid in forms of in kind and corvee especially in the pre capitalist societies and other equivalent functionalities un like today where money is used as the only medium of the tax payment. In addition to this, it can be either under the name of toll, tallage, tribute, impost, gabel, aid, subsidy, custom and even supply. According to Atkinson, 1977 indirect and direct tax vary from each other basing on terms and contexts. Direct tax was imposed on  individuals characteristics of the tax payer for instance the income tax is basically direct tax that are based on any ownership of the property or the simple existence and some one and his property, poll tax and property taxes. While indirect tax is that that is levied on the rights, privileges and the activities, or generally the transactions on the activities of the buyer and the seller for instance the tax on the sale of the property.

Tax memoranda

Technical advice memorandum 254157, 5/05/1995, IRC Sec (s) of Jimmy Rudd, TX 27564 Chicago, ID. No: 284640001 a member of golf and tennis clubs. According to the market loan rates loan rules as significant effect loans under code Sec. 7872 (c) (1)(E), any membership dues that the club which is a tax payer received from any member are treated as non taxable loans and therefore not income. This is basically because the taxpayer or the club of which you are a member is obliged to the refund of the deposits in 30 years just incase it haven’t done so. According to the membership regulations, the deposits are neither used in the buying of the delinquencies to the members nor advance payments but the deposits are not subject to market-loan rules.

The fact of the matter in this memorandum is that once a member has joined the club, he is bound by the regulations of the club through which he signs the membership form that consists all the regulations of the club membership. According to the codes of the club membership, every member that pays the deposit fee is always issued with a promissory note stating that the deposits issued to the club will be refunded to him after the clubs completion of its developments with no interest at all in a period not less than thirty years.

Therefore, if interest were surcharged on this deposit by the lender or any member of the club during the repayment, he would not be accorded due to the tax regulation. The borrower is in this case the one who might have paid tax for it but not the lender and there fore any money that is not to subject of tax could not gain any interest to the lender according to Section1.61-1 (a) of the income tax regulations.

In conclusion, the membership deposits for the clubs received by the taxpayer are not subject to tax according o section 61 of the tax code. Also under section 7872 (c)(1)(E) of the code, the club membership deposits received by the taxpayer are therefore not subject to any form of imputation at all.

The tax memorandum research of Diane Marlbury passive activity losses, 7/19/2010. Although this amended by the treasury in reflection to the adjustments made by P.L 103-66, it states that in case of any interest in the property that has been used in the activity seem to be substantially appreciated at the time of disposition then the gain from the disposition shall therefore be treated as not from the passive activity unless the interest in the property was used in the passive activity which applies to the case of Diane.

It will be possible for Diane to commence positive with the planned programme of her investment in another property in accordance to the regulations there under. It states that ban interest in property is treated as an interest in property held for investment for any period during which the interest is held through a C corporation or the similar entity of which a C corporation is the owners interest in the entity to derive only portfolio income as per 61.469-2T for the interests.

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