Instructions For Form It-204 - Partnership Return - New York State Department Of Taxation And Finance - 2004 Page 10
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Page 10 of 12 IT-204-
(2004)
access roads. It also includes land set aside or
Example 3: You sell qualified agricultural
converted property is included as part of the
retired under a federal supply management or
property to another person who continues to
total school tax bill, the partnership may
soil conservation program.
use the property in agricultural production.
allocate the taxes to the converted property on
This would not constitute a conversion to
the basis of the amount of acreage converted
A structure or building qualifies if it is used
nonqualified use.
to the total acreage covered by the tax bill.
(1) in the raising and production for sale of
agricultural commodities, or (2) for the storage
For more information concerning qualified
If the converted property is sold, the closing
of agricultural commodities for sale at a future
agricultural property, see Publication 51,
documents will show the amount of school
time, or (3) for the storage of supplies or for
Questions and Answers on New York State’s
taxes reimbursed to the partnership by the
the storage or servicing of equipment
Farmers’ School Tax Credit.
buyer. The partnership must reduce its current
necessary for agricultural production.
year’s eligible taxes paid by the amount of
Line 47 — Qualified conservation property is
these reimbursed taxes.
A structure or building is not qualified
acreage that, during the tax year, is enrolled in
agricultural property if it is used for (1) the
or participating in a federal environmental
For more information concerning eligible
processing of agricultural commodities, or
conservation acreage reserve program under
taxes, see Publication 51, Questions and
(2) the retail merchandising of agricultural
Title III of the Federal Agricultural
Answers on New York State’s Farmers’ School
commodities, or (3) the storage of
Improvement and Reform Act of 1996.
Tax Credit.
commodities for the personal use of the
Line 48 — If the partnership paid eligible
Line 49 — If the partnership owned qualified
partnership or its partners, or (4) the personal
taxes on qualified agricultural property during
agricultural property during tax year 2003, and
residence of any of the partners.
the tax year, enter the total amount paid on
all or part of that property was converted to
Note: In the case of the production of maple
line 48. If the partnership was a partner in
nonqualified use during tax year 2004, enter
syrup or cider, and the sale of wine from a
another partnership or the beneficiary of an
the number of acres of qualified agricultural
licensed farm winery as provided in Article 6
estate or trust that paid eligible taxes during
property converted to nonqualified use. For the
definition of conversion to nonqualified use,
of the Alcoholic Beverage Control Law,
the year, also include on line 48 the
buildings and structures used to process the
partnership’s share of eligible taxes paid by
see above.
sap into syrup, the apples into cider, or the
the other partnership or estate or trust.
Part
III
— Income and deductions
grapes into wine are considered qualified
Eligible taxes are real property taxes levied by
allocated to New York
agricultural property even though the property
a school district on qualified agricultural
is used in processing.
If the income from the partnership is all from
property owned by the partnership. Real
New York sources, do not complete
Processing means doing something to a farm
property taxes levied by towns, villages, cities,
III
Schedule B, Part
. You must complete
commodity beyond what is needed to make it
or their municipal governments are not eligible
III
Part
if the partnership conducts business in
initially marketable. The mere sorting,
taxes. Eligible taxes include school district
and out of New York State and the
washing, and packaging of commodities is not
taxes paid on qualified property which the
partnership’s allocation percentage to
considered processing.
partnership owns but rents to someone else.
New York State is less than 100%.
However, eligible taxes do not include school
A residence includes a house, mobile home,
district taxes paid on qualified agricultural
Corporate partners — In order to determine
etc., and any other buildings associated with it,
property the partnership rents from someone
their New York State corporation franchise tax
such as garages or sheds, that are used for
else, even if the rental agreement provides
liabilities, corporate partners in your
residential purposes.
that the partnership must actually pay the
partnership will also need to know the
taxes.
Note: Land and structures owned by the
New York State rules for their share of your
partnership and used in agricultural production
property, receipts, payroll, investment capital
Real property taxes levied by a school district
are qualified agricultural property even if the
assets and investment capital liabilities. Such
include all property taxes, special ad valorem
agricultural production is carried on by
rules can be found in Form CT-3/4-I,
levies, and special assessments levied by a
someone else. For example, land and
Instructions for Forms CT-4, CT-3, and
school district. Also included are taxes levied
buildings owned by the partnership are rented
CT-3-ATT.
by a school district for the support of local
to another person who actually uses the
libraries. Penalties and interest are not
Enter in this section the total amount of federal
property for agricultural production. The land
included.
partnership income, gain, loss, and deduction
and buildings are qualified agricultural
that is allocated to New York.
property for the partnership.
If the partnership owns both qualified
agricultural property and nonqualified
The federal items of income, gain, loss, and
Do not include on line 46 any acres of
agricultural property, and it receives only one
deduction as shown on federal Form 1065 or
property that were converted to nonqualified
school tax bill for all the property, it must
1065-B, Schedule K are allocated to New York
use during the tax year. Conversion to
apportion the total school taxes paid between
using the business allocation percentage from
nonqualified use means an outward or
the qualified and nonqualified property based
line 8, or the separate book method. Do not
affirmative act changing the use of the
upon the values of the property. The local
include in the allocation any items of real
agricultural property. The idling, nonuse, or
assessor may be able to tell you the value of
property.
sale of the property is not by itself a
your qualified and nonqualified property. If the
conversion.
You must enter the total amount of each item
assessor is unable to provide this information,
of income and deduction allocated to New York
the partnership may use any other reasonable
Example 1: You sell 100 acres of land to a
in the Allocated New York amounts column.
method, such as basing the value on the
developer in tax year 2004. The developer
recent sale price of similar property in the
actually builds a housing development on the
The total nonresident partners’ New York
area, to determine the value. In either case,
land during the tax year, and as a result the
amounts are computed using the appropriate
the partnership should keep records to
land is no longer used in agricultural
allocation method as explained in the following
substantiate the allocation.
production. This would be considered a
section.
conversion to nonqualified use.
Do not include on line 48 school taxes paid
Part-year resident partners — If you were a
on property converted to nonqualified use
Example 2: You discontinue farming during
partner and changed your New York resident
during the year. (See Conversion to
2004, but continue to hold the farm property
status during the tax year, you must prorate
nonqualified use above.)
for investment purposes. This would not
your distributive share of partnership income
constitute a conversion to nonqualified use.
according to the number of days in your
If the partnership continues to own the
resident and nonresident periods. The portion
property after the conversion, and the
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