The term 'distressed points' is usually used when points are about to expire, or sometimes for points in holding that can only be used for reservations within the next 60 days. This term is mainly used when renting points, as sometimes people will rent these points for less than usual as they have a limited time to use them.
People place different values on their points, but generally people consider the amount they paid to buy them and the annual dues. Most people would consider that they were losing money if they rented them for less than the annual fees. Even when renting distressed points people hope to cover the dues, plus a small amount towards the initial price if possible!
The taxes paid on money from points rentals depend on where you live, but it is/can be taxable. I'm not sure about TA tax, unless it is referring to Transient Accommodation Tax. This is a tax collected by the state for certain types of accommodation, such as rentals and hotels. This is mainly relevant at Aulani and the new VDH as it must be paid by the guest. At VGC I believe it is lower and included in the annual dues.
