Thursday, April 28, 2011

SALT To Taste: New Jersey Provides Additional Guidance Regarding Addbacks

The New Jersey Division of Taxation recently issued Technical Advisory Memorandum, Add Back of Related Member Interest Expense (TAM-13) to apply the New Jersey Tax Court's decision in Beneficial New Jersey, Inc. v. Director, Division of Taxation, Docket No. 009886-2007(N.J. Tax Ct., Aug. 31, 2010).  According to this court decision and TAM-13, related party interest payments can qualify for New Jersey's "unreasonable" exception to the addback rules. This newsletter looks at how the Court determined when the "unreasonable" exception may be utilized to deduct related party payments.

Read this SALT To Taste newsletter here.

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