New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter A - Business Corporation Franchise Tax › Part 4 - APPORTIONMENT › Subpart 4-2 - SPECIFIC APPORTIONMENT RULES › Section 4-2.5 - Interest income and net gains from loans.

Current through Register Vol. 46, No. 28, July 10, 2024
(Tax Law, section 210-A(5)(a)(2)(A))
(a)
(1) A
					 loan secured by real property means that real property constitutes 50% or more
					 of the aggregate value of the collateral used to secure a loan, when valued at
					 fair market value (FMV), as of the time the loan is originated.
(2) Interest income from loans secured by
					 real property located within New York State shall be included in New York
					 receipts. If one or more of the properties that secure the loan are located
					 outside of New York, the amount of interest income from such loan included in
					 New York receipts is the product of such interest income and a fraction, the
					 numerator of which is the FMV of real property located in New York State used
					 to secure the loan and the denominator of which is the FMV of all real property
					 used to secure the loan. All interest income from loans secured by real
					 property shall be included in everywhere receipts.
(3)
(i) The
					 amount of net gains (not less than zero) from sales of loans secured by real
					 property included in New York receipts is the product of net gains from all
					 loans secured by real property and a fraction, the numerator of which is gross
					 proceeds from sales of loans secured by real property located within New York
					 State and the denominator of which is gross proceeds from sales of loans
					 secured by real property located within and without New York State. Net gains
					 (not less than zero) from all loans secured by real property computed in
					 subparagraph (iii) of this paragraph shall be included in everywhere
					 receipts.
(ii) For each sale of a
					 loan secured by real property, the corporation shall compute a gain or loss
					 from the sale by subtracting the carrying cost of the loan from the sale price
					 of the loan. If the sale price exceeds the carrying cost, the result is a gain.
					 If the sale price is less than the carrying cost, the result is a
					 loss.
(iii) To determine the amount
					 of net gains from sales of loans secured by real property, the corporation
					 shall subtract the sum of all losses computed in subparagraph (ii) of this
					 paragraph from the sum of all gains computed in subparagraph (ii) of this
					 paragraph. If the result is equal to or less than zero, no amount is included
					 in New York receipts and everywhere receipts.
(iv) Gross proceeds shall be determined after
					 the deduction of transactional costs incurred to acquire the loan, but shall
					 not be less than zero. The transactional costs incurred to acquire the loan
					 shall not include the carrying cost of the loan.
(v) If one or more of the properties that
					 secure the loan are located outside of New York, the amount of gross proceeds
					 from loans secured by real property within New York State is the product of all
					 such gross proceeds and a fraction, the numerator of which is the FMV of real
					 property located in New York State used to secure the loan and the denominator
					 of which is the FMV of all real property used to secure the loan.