Kushner v. Director, Division of Taxation

SMALL, P.J.T.C.

This case arises under New Jersey’s Gross Income Tax Act, N.J.SA. 54A:1-1 through 54A:9-27. The specific question to be addressed is whether the distributive share of partnership income received by a trust of which the plaintiff is the sole beneficiary should be treated on the trust beneficiary’s Gross Income Tax return as distributive share of partnership income under N.J.SA 54A:5-l(k) or income from a trust or estate under N.J.S.A. 54A:5-1(h). Due to the structure of the New Jersey Gross Income Tax and in particular, its prohibition on the netting of losses in one category of…