New York: Nonresident Denied Alimony Deduction
Litvack, Rose, The CPA Journal
The question of whether a nonresident taxpayer of New York is entitied to take a deduction for alimony paid to their former spouse to reduce their New York income tax liability has been a recent issue before the New York Tax Appeals Bureau and in the New York Courts.
In a recent decision, In the Matter of the Petition of Harvey J. Coopersmith (DTA No. 813823, September 25, 1997), the New York Tax Tribunal (tribunal) reversed the Administrative Law Judge (ALJ) determination and disallowed the alimony deduction to a nonresident taxpayer. The tribunal based its decision on a New York Court of Appeals decision in a similar case, In the matter of Christopher H. Lunding et al. v. Tax Appeals Tribunal of the State of New York, et al. (No. 260, December 18, 1996), which had reversed the New York Supreme Court, Appellate Division's decision.
The ALJ determination in Coopersmith was based on the Appellate Division's decision in Lunding, which allowed a nonresident taxpayer to deduct the alimony paid to his former wife from his New York source income. But in the intervening time between the ALJ determination and the tribunal decision, the New York Court of Appeals had reversed the Lunding decision. …