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Sunday, December 11, 2011

DANIEL SCHULMANN, ET AL. VS. DIRECTOR, NEW JERSEY DIVISION, NEW JERSEY DIVISION OF TAXATION A-2089-10T3

DANIEL SCHULMANN, ET AL. VS. DIRECTOR, NEW JERSEY

DIVISION, NEW JERSEY DIVISION OF TAXATION

A-2089-10T3

The taxpayer used his personal funds to pay commissions

owed by two S corporations. He and his wife then deducted the

commission expenses from the S corporation income that they

reported on their personal income tax returns. Affirming the

reported opinion of the Tax Court, we held that the taxpayer

could not disregard the corporate form by taking personal

deductions for paying corporate obligations. The attempted

deductions also violated the rule against "cross-netting" of

losses, as set forth in N.J.S.A. 54A:5-2. 12-06-11