Sec. 3-2.3. Adjustments: items to be added to Federal taxable income

Tax Law, §§ 208(9), 210(20)(c)

(a) In computing entire net income, Federal taxable income must be adjusted by adding to it:

(1) any part of any income from dividends or interest on any kind of stock, securities or indebtedness for which a deduction has been allowed for Federal income tax purposes;

(2) all interest income which has not been included in computing Federal taxable income, such as interest on State and municipal bonds and certain obligations of the United States and its instrumentalities, less interest expense incurred to carry such investments, to the extent such interest expense has not been deducted in computing Federal taxable income;

(3) taxes on or measured by profits or income paid or accrued to the United States, any of its possessions or to any foreign country, including taxes in lieu of any of the foregoing taxes otherwise generally imposed by any foreign country or by any possession of the United States;

(4) net operating losses of other years which were deducted in computing Federal taxable income;

(5) all New York State franchise taxes imposed under article 9-A, article 32 and sections 183, 183-a, 184 and 184-a of article 9 of the Tax Law which were deducted in computing Federal taxable income;

(6) taxes on or measured by profits or income, or which include profits or income as a measure, paid or accrued to any other state of the United States, or any political subdivision thereof, or to the District of Columbia, including taxes expressly in lieu of any of the foregoing taxes otherwise generally imposed by any other state of the United States, or any political subdivision thereof, or the District of Columbia;

(7) any amount of interest directly or indirectly attributable to subsidiary capital or subsidiary income, and any other amount directly or indirectly attributable as a carrying charge, or otherwise, to subsidiary capital or to income, gains or losses from subsidiary capital, except to the extent such additions are not required by virtue of an exercise of discretion by the Commissioner;

(8) all losses from subsidiary capital which were deducted in computing Federal taxable income;

(9) in the case of a taxpayer organized outside the United States, all income from sources within and without the United States less all allowable deductions attributable thereto, which were not taken into account in computing Federal taxable income;

(10) the entire amount allowable as an exclusion or deduction for stock transfer taxes imposed by article 12 of the Tax Law in determining Federal taxable income, but only to the extent that such taxes are incurred and paid in market-making transactions;

(11) the amount computed pursuant to section 5-8.4 of this Title for the taxable year where stock is disposed of, the purchase of which was the basis for the economic development zone capital corporation tax credit;

(12) the amount of the special additional mortgage recording tax imposed by section 253(1-a) of the Tax Law allowed as an exclusion or deduction in determining Federal taxable income, where a credit is allowed, excluding carryovers of such credit, pursuant to Subpart 5-7 of this Title for such taxable year;

(13) if the credit allowed pursuant to Subpart 5-7 of this Title is not reflected in the computation of the gain or loss so as to result in an increase in such gain or decrease of such loss, for Federal income tax purposes, from the sale or other disposition of the property with respect to which the special additional mortgage recording tax imposed by section 253(1-a) of the Tax Law was paid, the amount of the special additional mortgage recording tax imposed by such section 253(1-a) which was paid and which is reflected in the computation of the basis of the property so as to result in a decrease in such gain or increase in such loss for Federal income tax purposes from the sale or other disposition of the property with respect to which such tax was paid;

(14) in the case of a taxpayer who is doing an insurance business as a member of the New York Insurance Exchange created under section 425-a of the Insurance Law:

(i) any item of loss or deduction of such business which is such taxpayer's distributive or pro rata share for Federal income tax purposes or which such taxpayer is required to take into account separately for Federal income tax purposes;

(ii) such taxpayer's distributive or pro rata share of the net loss, if any, of such business for Federal income tax purposes; and

(iii) such taxpayer's distributive or pro rata share of the allocated entire net income of such business as determined under article 33 of the Tax Law;

(15) for taxable years beginning after December 31, 1981, except with respect to property which is a qualified mass commuting vehicle described in section 168(f)(8) of the Internal Revenue Code, and property of a taxpayer principally engaged in the conduct of aviation (other than air freight forwarders acting as principal and like indirect air carriers) which was placed in service before taxable years beginning in 1989, any amount which the taxpayer claimed as a deduction in computing its Federal taxable income solely as a result of an election made pursuant to such section 168(f)(8) as it was in effect for safe harbor lease agreements entered into prior to January 1, 1984;

(16) for taxable years beginning after December 31, 1981, except with respect to property which is a qualified mass commuting vehicle described in section 168(f)(8) of the Internal Revenue Code, and property of a taxpayer principally engaged in the conduct of aviation (other than air freight forwarders acting as principal and like indirect air carriers) which was placed in service before taxable years beginning in 1989, any amount which the taxpayer would have been required to include in the computation of its Federal taxable income had it not made the election permitted pursuant to such section 168(f)(8) as it was in effect for safe harbor lease agreements entered into prior to January 1, 1984;

(17) for taxable years beginning after December 31, 1981, the amount allowable as the accelerated cost recovery system deduction determined pursuant to section 168 of the Internal Revenue Code, except with respect to:

(i) property subject to the provisions of section 280F of the Internal Revenue Code (regarding luxury automobiles and certain property used for personal purposes);

(ii) property placed in service in New York State in taxable years beginning after December 31, 1984; or

(iii) property of a taxpayer principally engaged in the conduct of aviation (other than air freight forwarders acting as principal and like indirect air carriers) which was placed in service before taxable years beginning in 1989; and

(18) upon the disposition of property to which section 3-2.4(a)(11) of this Subpart applies, the amount, if any, by which the aggregate of the deductions for depreciation attributable to such property deducted in computing entire net income pursuant to such paragraph (11) exceeds the aggregate of the accelerated cost recovery system deductions attributable to such property described in paragraph (17) of this subdivision.