Waksal v. Director, Division of Taxation, A-103 September Term 2011; Supreme Court; opinion by Patterson, J.; decided August 13, 2013. On certification to the Appellate Division. [Sat below: Judges Ashrafi and Fasciale in the Appellate Division.] DDS No. 35-1-0992 [26 pp.]
In 2002, Harlan Waksal made a $14,769,320 loan to his brother, Samuel. Samuel made no payments on the loan. Consequently, on their 2004 joint federal income tax return, Harlan and Carol Waksal reported a $14,769,320 short-term capital loss from the loan pursuant to 26 U.S.C.A. § 166(d)(1)(B), under which losses from worthless nonbusiness debts are treated as short-term capital losses. That provision has no direct counterpart in New Jersey tax law.
