Layton F. and Joan Smith, Plaintiffs-Respondents v. Director, Division of Taxation, Defendant-Appellant; Roger and…

Summary

The Supreme Court of New Jersey affirmed the Appellate Division, holding that the Director’s regulation treating dividends and capital gains from a partnership as separate gross‑taxed categories is inconsistent with the Gross Income Tax Act; partners may deduct partnership expenses against all partnership income, including dividends and gains, and the distributive share is taxed on a net consolidated basis.