Laurite v. Director, Division of Taxation

LASSER, P.J.T.C

Taxpayer contests the denial by the Director of the Division of Taxation (Director) of a credit on taxpayer’s 1987 gross income tax return for tax paid by taxpayer to the State of New York on a $73,874 cash distribution from a subchapter S corporation (S corporation) of which taxpayer is a stockholder. At issue is whether the distribution made to taxpayer in 1987 is from current or from prior earnings of the corporation. Director contends that since the corporation had accumulated earnings prior to 1987 and that New York tax was imposed on taxpayer on these pre-1987 earnings in…