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 2 - Residents › Part 119 - New York Fiduciary Adjustment › Section 119.1 - New York fiduciary adjustment and its allocation

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 619
(a)
General.
A resident estate or trust may realize items of income or
						gain or incur items of loss or deduction which, if received or incurred by an
						individual taxpayer, would give rise to one or more of the modifications
						described in sections
						112.2 
						-112.5, 112.7-112.9 and 115.2-115.3 of this Article. In the case of a resident
						estate or trust, all such modifications are combined in the New York fiduciary
						adjustment, which must be allocated among the estate or trust and its
						beneficiaries as provided in section
						119.2
						or
						119.3 
						of this Part. The modifications, or portions thereof, which may not be included
						in the New York fiduciary adjustment and which, therefore, may not be allocated
						among the estate or trust and its beneficiaries, are discussed in subdivision
						(c) of this section. The Federal taxable income of the estate or trust is
						modified to reflect its share of the New York fiduciary adjustment, and the
						Federal adjusted gross income of each resident beneficiary is modified to
						reflect his share thereof (see section
						112.4
						and
						118.4 
						of this Article). As to nonresident estates and trusts and nonresident
						beneficiaries, see Part 139 of this Title.
(b)
Definition of New York fiduciary
					 adjustment.
The
New York fiduciary adjustment
is the
						net amount of the modifications described in sections
						112.2 
						-112.3, 112.7-112.9, 115.2 and subdivisions (b) and (c) of section
						115.3 
						of this Article, which relate to items of income, gain, loss or deduction of
						the estate or trust. If the estate or trust is a beneficiary of another estate
						or trust or is a member of a partnership, the New York fiduciary adjustment
						also includes the modifications described, respectively, in section
						112.4
						or
						112.5 
						of this Article with respect to such other estate or trust or
						partnership.
Example:
A resident estate or trust has the following
						modifications for 1979:
Additions:
(1)
Interest income received on bonds of the State of
								  California. (See section
								  112.2[a] 
								  of this Article.)
$1,000
(2)
New York State personal income tax paid in 1979.
								  (See section
								  115.2[a] 
								  of this Article.)
300
(3)
Expenses deducted in computing Federal taxable
								  income of the estate or trust which were incurred for the production or
								  collection of income from United States government bonds. (See section
								  115.2[c] 
								  of this Article.)
50
Total additions
$1,350
Subtractions:
(4)
Interest income received on United States
								  government bonds. (See section
								  112.3[a] 
								  of this Article.)
$600
(5)
Refund received in 1979 of overpayment of prior
								  year's New York State personal income tax. (See section
								  112.3[g] 
								  of this Article.)
100
(6)
Ordinary and necessary expenses paid during 1979
								  for the production or collection of income from State of California bonds. (See
								  section
								  115.3[c] 
								  of this Article.)
150
Total subtractions
850
New York fiduciary adjustment
$500
Since the total of the items to be added to Federal
						taxable income is more than the total of the items to be subtracted, the New
						York fiduciary adjustment (net amount) is a plus figure; that is, the share of
						the trust or estate in this fiduciary adjustment must be added to its Federal
						taxable income, and the share of any 400 resident beneficiary must be added to
						his Federal adjusted gross income. If the fiduciary adjustment, on the facts of
						a particular case, should be a minus figure, the share of the estate or trust
						would be subtracted from its Federal taxable income and the share of any
						resident beneficiary would be subtracted from his Federal adjusted gross
						income.
(c) The net amount
					 of the modifications which comprise the New York fiduciary adjustment does not
					 include:
(1) any of the modifications or
					 portions thereof, described in sections
					 118.3
					 and
					 118.5 
					 of this Article, which relate to principal or corpus items included in the
					 Federal taxable income of the estate or trust and which are not included in the
					 Federal distributable net income of the estate or trust;
(2) any modification or portion thereof,
					 described in subdivisions (a) and (b) of section
					 112.2 
					 of this Article, subdivisions (a), (b) and (d)-(g) of section
					 112.3 
					 of this Article, with respect to any amount which is paid or permanently set
					 aside during the taxable year for a charitable purpose in accordance with the
					 terms of the governing instrument. If a charitable organization is specifically
					 designated in the governing instrument as a distributee of a particular item of
					 income, or portion thereof, in respect of which a modification would ordinarily
					 be required under any of the subdivisions referred to in this paragraph, no
					 part of such modification is to be included in the New York fiduciary
					 adjustment. If a charitable organization is designated in the governing
					 instrument as a distributee of a percentage or part of the estate or trust
					 income, but not as the distributee of a particular item of income, the portion
					 of such a modification to be excluded from the New York fiduciary adjustment is
					 such proportion of the modification as the amount paid or payable to the
					 charitable organization bears to the total income of the estate or trust.
Example:
The governing instrument of a resident trust provides
						that the income of the trust is to be divided as follows: one-third to a
						charitable organization, one-third to a designated beneficiary, and the
						remaining one-third accumulated for later distribution to a minor. The income
						of the trust for taxable year 1979 includes interest on California bonds of
						$9,000 and ordinary dividend in come of $15,000. Based upon these facts, the
						New York fiduciary adjustment would be determined in the following
						manner:
Total California bond interest
Less: Portion attributable to the
								  charitable organization computed as follows:
$8,000 (total income paid or set aside for
								  charitable organization)
×
$9,000 (California
=
$3,000
$2,400 (total income of trust)
bond interest)
New York fiduciary adjustment