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Warning
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Simple English definitions for legal terms
fruit-and-the-tree doctrine
Read a random definition: High Court of Errors and Appeals
A quick definition of fruit-and-the-tree doctrine:
The fruit-and-the-tree doctrine is a rule in taxes that says if you make money, you can't give it to someone else to avoid paying taxes on it. It's like if you have an apple tree and you give someone else the apples, you still have to pay taxes on the apples because they came from your tree. The same goes for money you earn - you can't just give it away to avoid paying taxes on it.
A more thorough explanation:
The fruit-and-the-tree doctrine is a tax rule that states that a person who earns income cannot give that income to someone else to avoid paying taxes on it.
For example, let's say that John earns $50,000 in a year. He cannot give that money to his friend Bob and claim that Bob earned the money instead. This is because John is the "tree" that produced the "fruit" (income), and he is responsible for paying taxes on that income.
Another example is if a business owner tries to transfer profits to a family member to avoid paying taxes on them. This is not allowed under the fruit-and-the-tree doctrine.
The fruit-and-the-tree doctrine is important because it prevents people from avoiding taxes by transferring income to someone else. It ensures that everyone pays their fair share of taxes based on their own income.