N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 3-7.4

Current through Register Vol. 46, No. 45, November 2, 2024

Section 3-7.4 - Capital losses sustained in taxable years beginning on or after January 1, 2015

(a) In computing the business income base, taxpayers generally start with Federal taxable income that includes capital gains in excess of capital losses without differentiation between New York investment capital gains and losses and New York business capital gains and losses. For New York State purposes, taxpayers must ensure that investment capital losses do not offset business capital gains and that business capital losses do not offset investment capital gains when calculating the business income base.

(b) A corporation or combined group, in the case of a combined report, subject to tax under article 9-A must properly classify and separate any amount of Federal capital losses and Federal capital gains, as such terms are defined in IRC section 1222, into New York business capital gains or losses and New York investment capital gains or losses. To calculate the business income base, Federal taxable income must be increased by the amount of New York net investment capital loss that offsets New York net business capital gains. Similarly, to calculate the business income base, Federal taxable income must be increased by the amount of New York net business capital loss that offsets New York net investment capital gains.

(c) For any amount of Federal capital loss sustained in an article 9-A New York non-filing year that is used on a Federal return in an article 9-A New York filing year, Federal taxable income in that New York filing year must be increased by the amount of Federal capital loss that was used from that article 9-A New York non-filing year.

(d) For any amount of Federal capital loss sustained in a New York S year that is used on a Federal return in a New York C year, Federal taxable income in that New York C year must be increased by the amount of the Federal capital loss that was used from the New York S year.

(e) For any amount of Federal capital loss sustained in a non-captive REIT filing year that is used on a Federal return in a captive REIT filing year, Federal taxable income in that captive REIT filing year must be increased by the amount of the Federal capital loss that was used from the non-captive REIT filing year.

(f) For any amount of Federal capital loss sustained in a non-captive RIC filing year that is used on a Federal return in a captive RIC filing year, Federal taxable income in that captive RIC filing year must be increased by the amount of the Federal capital loss that was used from the non-captive RIC filing year.

(g) For any amount of Federal capital loss sustained in a non-captive REIT filing year that is used on a Federal return in a year that the corporation, trust, or association fails to meet the definition and requirements of a REIT, Federal taxable income in that filing year must be increased by the amount of the Federal capital loss that was used from the non-captive REIT filing year.

(h) For any amount of Federal capital loss sustained in a non-combinable captive insurance company filing year that is used on a Federal return in a combinable captive insurance company filing year, Federal taxable income in that non-combinable captive insurance company filing year must be increased by the amount of the Federal capital loss that was used from the combinable captive filing year.

N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 3-7.4

Adopted New York State Register December 27, 2023/Volume XLV, Issue 52, eff. 12/27/2023