N.Y. Comp. Codes R. & Regs. tit. 20 § 138.6
Tax Law, § 638(b)
For purposes of this Part, an item of income, gain, loss or deduction, including items comprising income in respect of a decedent, is considered derived from or connected with New York State sources when any such item is attributable to the ownership by the estate or trust of any interest in real or tangible personal property in New York State, or when the item is attributable to a business, trade, profession or occupation carried on in New York State by the estate or trust, in accordance with the applicable rules set forth in Part 132 of this Article as in the case of nonresident individuals. Deductions with respect to capital losses, net long-term capital gains and net operating losses are based solely on income, gains, losses and deductions derived from or connected with New York State sources but otherwise determined in the same manner as the corresponding Federal deductions (see section 132.7 of this Article). With respect to net long-term capital gains of a nonresident estate or trust from New York State sources in excess of its net short-term capital losses from New York State sources, see section 112.2(i) of this Title.
N.Y. Comp. Codes R. & Regs. Tit. 20 § 138.6