New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter II - Income Taxes and Estate Taxes › Subchapter A - New York State Personal Income Tax Under Article 22 Of The Tax Law › Article 4 - New York State Income Tax Returns and Payment of Income Tax › Part 154 - Change Of Resident Status During Year › New York Taxable Income, New York Personal Service Taxable Income and New York State Minimum Taxable Income › Section 154.10 - Special accruals

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 654(c)
(a) Where the resident status of an
						individual or of a trust changes from resident to nonresident, such individual
						or trust must, regardless of the method of accounting normally employed, accrue
						and include, on the New York State income tax return and any schedules require
						to be filed with such return for the portion of the year prior to the change of
						resident status, any items of income, gain, loss or deduction (and any New York
						items of tax preference) accruing prior to the change of residence, if not
						otherwise properly includible or allowable for New York State income tax
						purposes or New York State minimum income tax purposes for such portion of the
						taxable year or for a prior taxable year. That is, in computing New York
						taxable income, New York personal service taxable income and New York State
						minimum taxable income for the resident period, such individual or trust must
						include all items required to be included if a Federal income tax return were
						being filed for the same period on the accrual basis, together with any other
						accruals such as deferred gain on installment obligations which are not
						otherwise includible or deductible for Federal or New York State income tax
						purposes or for Federal or New York State minimum income tax purposes either
						for such resident period or for a prior taxable period. See sections
						154.11
						and
						154.12 
						of this Part for relief from the accrual requirements of this section and for
						the special accruals relating to the ordinary income portion of lump sum
						distributions, respectively.
(b)
(1) For example, if an individual sells his
						business at a gain, under contract whereby the purchase price is to be paid in
						installments, and later changes his status from resident to nonresident, he
						must accrue, on the New York State personal income tax return for the resident
						period, the entire amount of the gain remaining unpaid from such installment
						obligations, regardless of the method of accounting he normally uses in
						reporting his transactions. Furthermore, any long-term capital gain which he
						realized as a result of the installment sale would also be required to be
						accrued and taken into consideration in determining the New York items of tax
						preference to be included in computing the New York State minimum income tax on
						the
New York State Minimum Income Tax Computation Schedule,
which is required to be filed for the New York State resident period if the New
						York items of tax preference exceed the allowable specific deduction. (See Part
						122 of this Title.)
(2) If a trust
						sells its business or assets of the trust at a gain, under a contract whereby
						the purchase price is to be paid in installments, and the trust later changes
						its status from resident to nonresident, the fiduciary of the trust must
						accrue, on the New York State fiduciary return for the resident period, the
						entire amount of the gain remaining unpaid from such installment obligations,
						regardless of the method of accounting the trust normally uses in reporting
						such transactions. Where such gains from installment sales are long-term
						capital gains, a
New York State Minimum Income Tax Computation
						Schedule
must be filed by the trust for its resident period to include
						the accrued New York items of tax preference attributable to the trust if its
						New York items of tax preference exceed its allowable specific deduction. (See
						Part 122 of this Title.)
(3) Where
						a beneficiary of an estate or trust (including an individual or a trust)
						changes status during the taxable year from resident to nonresident, such
						individual or trust must accrue, on the New York State income tax return for
						the resident period, any estate or trust income credited, distributable,
						payable or required to be distributed to such beneficiary as of the date of
						such beneficiary's change of residence.