Sec. 18-3.3. Adjusted eligible net income

Tax Law, § 1453(f), (l)

(a) The adjusted eligible net income of the IBF is allowed as a deduction in computing the taxpayer's entire net income, to the extent not deductible in determining Federal taxable income. This deduction is taken before the taxpayer allocates its entire net income within and without New York State. The adjusted eligible net income of the IBF is determined by subtracting from the eligible net income of the IBF the ineligible funding amount (see section 18-3.10 of this Subpart - Ineligible funding amount) and the floor amount (see section 18-3.11 of this Subpart - Floor amount). The eligible net income of the IBF is the amount remaining after subtracting from the eligible gross income of the IBF (see section 18-3.4 of this Subpart - Eligible gross income) the expenses applicable to such gross income (see section 18-3.5 of this Subpart - Direct expenses of the IBF, section 18-3.6 of this Subpart -Interest expense of the IBF, section 18-3.7 of this Subpart - Bad debt deduction of the IBF, and section 18-3.8 of this Subpart - Indirect expenses of the IBF, including head office expenses). When the IBF has eligible gross income and ineligible gross income for the taxable year, eligible net income of the IBF is computed by reducing eligible gross income by those expenses which are apportioned to eligible gross income pursuant to section 18-3.9 of this Subpart.

(b) The eligible gross income of the IBF is the amount of gross income (including gross income from interoffice transactions) derived from the activities described in section 18-3.4 of this Subpart that would be includible in the computation of the IBF's entire net income for the taxable year, as if the IBF were a separate corporation.

(c) Expenses applicable to the eligible gross income of the IBF are those expenses or other deductions (including expenses or other deductions from interoffice transactions) described in sections 18-3.5 through 18-3.8 of this Subpart that are directly or indirectly attributable to the eligible gross income of the IBF.

(d) The Tax Commission may, whenever necessary in order to properly reflect the adjusted eligible net income or the entire net income of the taxpayer, determine the taxable year in which any item of income or deduction shall be included without regard to the method of accounting used by the taxpayer.