Instructions For Form It-204 - Partnership Return - New York State Department Of Taxation And Finance - 2003 Page 8
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Page 8 of 12 IT-204-
(2003)
allows certain wage and salary payments to
If you are making addition A-9 for any
S-17 Accelerated cost recovery
others to be taken as credits against taxes
percentage depletion deducted for federal
property; year of disposition adjustment
instead of as expenses against income.
purposes, then:
If the partnership disposed of property
New York State does not have comparable
during the tax year that was depreciated for
• compute the cost depletion that would be
credits, but does allow the expenses.
federal purposes using ACRS, and if ACRS
allowed on that property by section 611
depreciation was not allowed for state
of the IRC without any reference to either
If you are entitled to take either an Indian
purposes (see A-2 on page 5), then the
section 613 or 613A of that code; and
employment credit, a work opportunity
partnership must complete Part II of
credit, or an empowerment zone
• include that amount on line 10.
Form IT-399 to figure the amount, if any, to
employment credit for wages and salaries
be included on line 10.
S-13 Special depreciation expenditures
paid during the tax year, then include the
The excess expenditures incurred in tax
wage payments not deductible for federal
S-18 Qualified emerging technologies
years beginning before 1987 in connection
purposes on line 10.
investments (QETI) — The partnership
with depreciable, tangible business
may defer the gain on the sale of qualified
S-10 Sales or dispositions of assets
property located in New York State may be
emerging technology investments (QETI)
acquired before 1960 with greater state
carried over to the following tax year or
that are:
than federal basis — When federally
years and subtracted from the partner’s
1. held for more than 36 months, and
taxable gains are realized from the sale of
federal adjusted gross incomes for that
certain assets that have higher adjusted
year(s) if those expenses exceeded your
2. rolled over into the purchase of a
basis for state tax purposes, subtraction
New York adjusted gross income before the
QETI within 365 days.
allowance of those expenditures.
adjustments must be made to reduce the
Replacement QETI must be purchased
gain for state tax purposes. State income
If the partnership incurred such
within the 365-day period beginning on the
tax laws prior to 1960 and currently existing
expenditures, then complete Form IT-211,
date of sale. Gain is not deferred and must
state income tax laws about depletion can
Special Depreciation Schedule , to
be recognized to the extent that the amount
cause these differences in adjusted basis.
determine the amount to include on line 10.
realized on the sale of the original QETI
If the partnership is reporting a gain for
exceeds the cost of replacement QETI. The
S-14 Gain to be subtracted from the
federal tax purposes that was from either:
gain deferral applies to any QETI sold on or
sale of a new business investment
after March 12, 1999, that meets the
• property that had a higher adjusted basis
included in federal income — If the
holding-period criteria. The gain deferred
for New York State income tax purposes
partnership reported a capital gain on its
must be added back in the year the
than for federal income tax purposes on
federal income tax return from the sale of a
replacement QETI is sold.
December 31, 1959 (or on the last day of
new business investment that was issued to
a fiscal year ending during 1960); or
the partnership before 1988 and was held
If the partnership elects to defer the gain
• property that was held in connection with
by the partnership for at least four years,
from the sale of QETI, then include on
mines, oil or gas wells, and other natural
then enter on line 10:
line 10 the amount of the gain deferral to
deposits and that had a higher adjusted
the extent the gain was included in federal
• If the investment was held at least four
basis for New York State income tax
taxable income. If purchase of the
years but less than five years, 25% of
purposes than for federal tax purposes
replacement QETI within the 365-day
that federal gain; or
when sold;
period occurs in the same tax year as the
• If the investment was held at least five
sale of the original QETI, or in the following
then include on line 10 the lesser of:
years but less than six years, 50% of that
tax year and before the date the
• the gain itself; or
federal gain; or
partnership return is filed, then report the
• the difference in the adjusted basis.
• If the investment was held at least six
deduction on that return. If purchase of the
years, 100% of that federal gain.
replacement QETI within the 365-day
S-11 Income earned before 1960 and
period occurs in the following tax year and
previously reported to New York State
S-15 Amount that was included in
on or after the date the partnership return is
Due to a different set of state income tax
federal income because the IRC 168(f)(8)
filed, then the partnership must file an
laws that applied to tax years ending before
election was made (see A-11 for a
amended return to claim the deduction. In
1960 (and any fiscal year ending during
definition of safe harbor leases) — If an
addition, each partner must file an
1960), income that is reportable for federal
amount was included in the partnership’s
amended personal income tax return to
purposes this year may have already been
federal income (except for mass transit
claim his or her share of the deduction.
reported for New York purposes. This
vehicles) solely because the partnership
income is not subject to New York tax
made the safe harbor election on its federal
A QETI is an investment in the stock of a
again.
return for agreements entered into before
corporation or an ownership interest in a
January 1, 1984, then include that amount
partnership or LLC that is a qualified
If the partnership reported any income or
on line 10.
emerging technology company. A QETI is
gain on its federal return for this tax year
also an investment in a partnership or an
(including annuity income) that was
S-16 Amount that could have been
LLC to the extent that such partnership or
properly reported as income on the
excluded from federal income had the
LLC invests in qualified emerging
New York State partnership return of this
IRC 168(f)(8) election not been made
technology companies. The investment
partnership for a tax year prior to 1960 (or a
(see A-11 for a definition of safe harbor
must be acquired by the taxpayer as
fiscal year ending in 1960), then include
leases) — If an amount could have been
provided in IRC section 1202(c)(1)(B), or
this income on line 10.
excluded from the partnership’s federal
from a person who acquired it pursuant to
income (except for mass transit vehicles)
S-12 Cost depletion — New York State
this section. IRC section 1202(c)(1)(B)
had the safe harbor election not been made
does not allow percentage depletion of
requires the acquisition to be original issue
on its federal tax return for agreements
natural resource holdings (see A-9 on
from the company, either directly or through
entered into before January 1, 1984, then
page 6) but does allow cost depletion.
an underwriter, and in exchange for cash,
include that amount on line 10.
services, or property (but not in stock).
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