Here is what I have so far:
L.H.S.
$x \wedge (\neg y \leftrightarrow z) \equiv x \wedge (( \neg y \to z) \wedge (z \to \neg y)) \equiv x \wedge (( \neg (\neg y) \vee z) \wedge (\neg z \vee \neg y)) \equiv (x \wedge(y \vee z)) \wedge (x \wedge ( \neg z \vee \neg y)) \equiv (( x \wedge y) \vee (x \wedge z)) \wedge ((x \wedge \neg z) \vee (x \wedge \neg y))$
R.H.S
$((x \to y) \vee \neg z) \to (x \wedge \neg (y \to z)) \equiv \neg ((\neg x \vee y) \vee \neg z) \vee (x \wedge \neg ( \neg y \vee z)) \equiv (( x \wedge \neg y) \wedge z ) \vee (x \wedge (y \wedge \neg z)) \equiv ((x \wedge z) \wedge (\neg y \wedge z)) \vee (( x \wedge y) \wedge (x \wedge \neg z))$
I see that $(x \wedge y), (x \wedge z), (x \wedge \neg z)$ exist in both of the final statements, however, the only difference is between $(x \wedge \neg y)$ on the L.H.S. and $(\neg \wedge z)$ on the R.H.S. There is also a difference in the unions and intersections.
Could someone please help put me in the right direction or suggest another approach on how to prove/disprove this? Thank you.
From your work, by the distributive property, the L.H.S. is $$( x \wedge y) \land (x \wedge \neg z) \vee ( x \wedge z)\wedge (x \wedge \neg z) \vee ( x \wedge y) \land (x \wedge \neg y) \vee ( x \wedge z)\wedge (x \wedge \neg y)$$ that is (recall that $a\wedge a\equiv a$, and $a\wedge \lnot a\equiv F$), $$( x \wedge y \wedge \neg z)\vee F\vee F\vee (x \wedge \neg y\wedge z)$$ which becomes $$( x \wedge y \wedge \neg z)\vee (x \wedge \neg y\wedge z).$$ Now we compare the above expression with the R. H. S. $$((x \wedge z) \wedge (\neg y \wedge z)) \vee (( x \wedge y) \wedge (x \wedge \neg z))\equiv (x \wedge z \wedge \neg y) \vee ( x \wedge y \wedge \neg z)$$ and we find that they are equivalent.