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This entry was published on 2019-04-19
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SECTION 631
New York source income of a nonresident individual
Tax (TAX) CHAPTER 60, ARTICLE 22, PART 3
§ 631. New York source income of a nonresident individual. (a)
General. The New York source income of a nonresident individual shall
be the sum of the following: (1) The net amount of items of income,
gain, loss and deduction entering into his federal adjusted gross
income, as defined in the laws of the United States for the taxable
year, derived from or connected with New York sources, including: (A)
his distributive share of partnership income, gain, loss and deduction,
determined under section six hundred thirty-two, and

(B) his pro rata share of New York S corporation income, loss and
deduction, increased by reductions for taxes described in paragraphs two
and three of subsection (f) of section thirteen hundred sixty-six of the
internal revenue code, determined under section six hundred thirty-two,
and

(C) his share of estate or trust income, gain, loss and deduction,
determined under section six hundred thirty-four and

(2) The portion of the modifications described in subsections (b) and
(c) of section six hundred twelve which relate to income derived from
New York sources (including any modifications attributable to him as a
partner or shareholder of a New York S corporation).

(b) Income and deductions from New York sources.

(1) Items of income, gain, loss and deduction derived from or
connected with New York sources shall be those items attributable to:

(A) the ownership of any interest in real or tangible personal
property in this state; or

(1) For purposes of this subparagraph, the term "real property located
in this state" includes an interest in a partnership, limited liability
corporation, S corporation, or non-publicly traded C corporation with
one hundred or fewer shareholders (hereinafter the "entity") that owns
real property that is located in New York or owns shares of stock in a
cooperative housing corporation where the cooperative units relating to
the shares are located in New York; provided, that the sum of the fair
market values of such real property, cooperative shares, and related
cooperative units equals or exceeds fifty percent of all the assets of
the entity on the date of sale or exchange of the taxpayer's interest in
the entity. Only those assets that the entity owned for at least two
years before the date of the sale or exchange of the taxpayer's interest
in the entity are to be used in determining the fair market value of all
the assets of the entity on the date of sale or exchange. The gain or
loss derived from New York sources from the taxpayer's sale or exchange
of an interest in an entity that is subject to the provisions of this
subparagraph is the total gain or loss for federal income tax purposes
from that sale or exchange multiplied by a fraction, the numerator of
which is the fair market value of the real property, and the cooperative
housing corporation stock and related cooperative units located in New
York on the date of sale or exchange and the denominator of which is the
fair market value of all the assets of the entity on the date of sale or
exchange.

(B) a business, trade, profession or occupation carried on in this
state; or

(C) in the case of a shareholder of an S corporation where the
election provided for in subsection (a) of section six hundred sixty of
this article is in effect, the ownership of shares issued by such
corporation, to the extent determined under section six hundred
thirty-two of this article; or

(D) winnings from a wager placed in a lottery conducted by the
division of the lottery, if the proceeds from such wager exceed five
thousand dollars; or

(D-1) gambling winnings in excess of five thousand dollars from
wagering transactions within the state; or

(E) gains from the sale, conveyance or other disposition of shares of
stock in a cooperative housing corporation in connection with the grant
or transfer of a proprietary leasehold by the owner thereof and subject
to the provisions of article thirty-one of this chapter, whether such
shares are held by a partnership, trust or otherwise; or

(E-1) in the case of an S corporation for which an election is in
effect pursuant to subsection (a) of section six hundred sixty of this
article that terminates its taxable status in New York, any income or
gain recognized on the receipt of payments from an installment sale
contract entered into when the S corporation was subject to tax in New
York, allocated in a manner consistent with the applicable methods and
rules for allocation under article nine-A or thirty-two of this chapter,
in the year that the S corporation sold its assets.

(F) income received by nonresidents related to a business, trade,
profession or occupation previously carried on in this state, whether or
not as an employee, including but not limited to, covenants not to
compete and termination agreements. Income received by nonresidents
related to a business, trade, profession or occupation previously
carried on partly within and partly without the state shall be allocated
in accordance with the provisions of subsection (c) of this section.

(2) Income from intangible personal property, including annuities,
dividends, interest, and gains from the disposition of intangible
personal property, shall constitute income derived from New York sources
only to the extent that such income is from property employed in a
business, trade, profession, or occupation carried on in this state or
from winnings from a wager placed in a lottery conducted by the division
of the lottery, if the proceeds from such wager exceed five thousand
dollars. Income from the disposition of intangible personal property
shall also constitute income derived from New York sources to the extent
such gains are from the sale, conveyance or other disposition of shares
of stock in a cooperative housing corporation in connection with the
grant or transfer of a proprietary leasehold by the owner thereof and
subject to the provisions of article thirty-one of this chapter, whether
such shares are held by a partnership, trust or otherwise.

(3) Income directly or indirectly derived by an athlete, entertainer,
or performing artist from closed-circuit and cable television
transmissions of an event (other than events occurring on a regularly
scheduled basis) taking place within the state as a result of the
rendition of services by such athlete, entertainer or performing artist
shall constitute income derived from New York sources only to the extent
that such transmissions were received or exhibited within the state.

(4) Deductions with respect to capital losses, passive activity losses
and net operating losses shall be based solely on income, gain, loss and
deduction derived from or connected with New York sources, under
regulations of the commissioner of taxation and finance, but otherwise
shall be determined in the same manner as the corresponding federal
deductions.

(5) In the case of a nonresident individual or partner of a
partnership doing an insurance business as a member of the New York
insurance exchange described in section six thousand two hundred one of
the insurance law, any item of income, gain, loss or deduction of such
business which is the individual's distributive or pro rata share for
federal income tax purposes or which the individual is required to take
into account separately for federal income tax purposes, shall not
constitute income, gain, loss or deduction derived from New York
sources.

(6) The deduction allowed by section two hundred fifteen of the
internal revenue code, relating to alimony, shall not constitute a
deduction derived from New York sources.

(c) Income and deductions partly from New York sources. If a business,
trade, profession or occupation is carried on partly within and partly
without this state, as determined under regulations of the tax
commission, the items of income, gain, loss and deduction derived from
or connected with New York sources shall be determined by apportionment
and allocation under such regulations.

(d) Purchase and sale for own account.-- A nonresident, other than a
dealer holding property primarily for sale to customers in the ordinary
course of his trade or business, shall not be deemed to carry on a
business, trade, profession or occupation in this state solely by reason
of the purchase and sale of property or the purchase, sale or writing of
stock option contracts, or both, for his own account.

(e) Military pay. Compensation paid by the United States for active
service in the armed forces of the United States, performed by an
individual not domiciled in this state, shall not constitute income
derived from New York sources.

(f) Husband and wife. If husband and wife determine their federal
income tax on a joint return but are required to determine their New
York income taxes separately, they shall determine their New York source
incomes separately as if their federal adjusted gross incomes had been
determined separately.

(g) Stock option grants, stock appreciation rights and restricted
stock. A nonresident taxpayer who has been granted statutory stock
options, restricted stock, nonstatutory stock options or stock
appreciation rights and who, during such grant period, performs services
within New York for, or is employed within New York by, the corporation
granting such option, stock or right, shall compute his or her New York
source income as determined under rules and regulations prescribed by
the commissioner.