Sec. 137.3. Modification of partnership items in partner's New York State nonresident personal income tax return

Tax Law, § 637(c)

(a) In determining the New York adjusted gross income of a nonresident partner, any modification described in sections 112.2, 112.3 and 112.7 through 112.9 of this Title which relates to an item of partnership income, gain, loss or deduction must be made in accordance with the partner's distributive share of such item for Federal income tax purposes, but is limited to the portion derived from or connected with New York State sources. (A nonresident partner's distributive share of a partnership item is determined in the same manner as for a resident partner; see section 137.5(a) of this Part and Part 117 of this Title.)

(b) In determining the New York itemized deduction of a nonresident partner, any modification, described in sections 115.2 through 115.4 of this Title, which relates to a partnership item which for Federal income tax purposes is allowable as an itemized deduction, must be made in accordance with the partner's distributive share of such item for Federal income tax purposes.

(c) Reporting modifications on the New York State partnership return.

The total applicable modification of any partnership item of income, gain, loss or deduction must be set forth on the New York State partnership return, together with the respective portion thereof distributable to each partner. Where a modification pertains to an item includible in Federal adjusted gross income, the New York State partnership return must show each nonresident's portion thereof derived from or connected with New York State sources. Where a modification pertains to an item which, for Federal income tax purposes, is allowable as an itemized deduction to the partners, no allocation of the portion derived from New York State sources is required to be made.

(d) Where the nonresident partner's distributive share of partnership items of in come, gain, loss or deduction derived from or connected with New York State sources is determined to any extent under the special rules set forth in section 137.2 of this Part, any applicable modification must be similarly determined.