Instructions For Form It-204 - Partnership Return - New York State Department Of Taxation And Finance - 2004 Page 5
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IT-204-
(2004) Page 5 of 12
If you claimed ACRS depreciation on your
(c) If the partnership’s ordinary income
unincorporated business taxes (including
New York City unincorporated business taxes)
federal return for:
includes a deduction for expenses related
to the production for income that is taxable
in figuring its federal ordinary income, then
• property placed in service during tax years
for federal purposes but exempt from
include the total deduction on line 9. For
1981 through 1984 (other than 280F
New York State tax, then include that
example, if the partnership deducted New York
property); or
interest expense on line 9.
City unincorporated business tax on federal
• property placed in service outside New York
Form 1065 or 1065-B, include that tax
State during tax years 1985-1993 and fiscal
A-6 Special additional mortgage
deduction on line 9.
tax years beginning in 1993 (other than
recording tax deduction — If the partnership
280F property), and you elect to continue
excluded or deducted special additional
Note: The LLC/LLP filing fee is not an income
using IRC 167 depreciation;
mortgage recording tax in figuring its federal
tax and is not added back on line 9.
ordinary income, and the partners were
then include on line 9 that deduction. The
previously allowed a New York State credit for
A-2 Accelerated cost recovery system
partnership must complete Form IT-399,
that tax on their personal income tax returns,
(ACRS) deduction — New York State does
New York State Depreciation Schedule, and
then include on line 9 the amount that was
not allow the federal accelerated cost recovery
attach it to Form IT-204.
excluded or deducted.
system depreciation deduction (ACRS) for
A-3 Interest income on state and local
property (except for property classified as IRC
A-7 Special additional mortgage
bonds and obligations (but not those of
section 280F property) placed in service
recording tax basis adjustment — If
New York State or its local governments)
inside or outside New York State during tax
property on which you paid the special
Interest income on obligations of other states
years 1981, 1982, 1983, and 1984. You must
additional mortgage recording tax is sold or
or political subdivisions of those states that is
figure your New York depreciation by using
disposed of, and the partners claimed the
exempt from federal income tax is subject to
one of the methods provided for in IRC
New York State credit in a prior year for the
New York State tax. This includes interest
special additional mortgage recording tax paid
section 167 as it was in effect on
income on state and local bonds (but not
on that property, and the federal basis of the
December 31, 1980 (for example, straight line,
those of New York State and local
property was not adjusted to reflect the
declining balance, etc.).
governments within the state), interest and
amount of credit allowed, then include on
dividend income from tax-exempt bond mutual
For property (except for property classified as
line 9 the amount of the basis that was not
funds, and tax-exempt money market funds
IRC section 280F property) placed in service
adjusted for the amount of the credit claimed.
that invest in obligations of states other than
outside New York State for tax years beginning
New York.
A-8 Special depreciation — If the
after 1984 but before 1994, New York did not
partnership made an election for tax years
If the partnership received or was credited
allow ACRS or MACRS depreciation under
beginning before 1987 for:
with this type of income during the tax year,
section 168 of the IRC. Instead, New York
and the income was not includable in the
• special depreciation (see Form IT-211),
allowed the depreciation deduction that would
partnership’s federal income, then include that
• research and development expenditures,
have been allowed under IRC section 167 as it
income on line 9.
was in effect on December 31, 1980.
• waste treatment facility expenditures,
A-4 Investment income from certain
• air pollution control equipment expenditures,
However, as a result of a recent court decision
obligations of U.S. government agencies or
or
(Reynolds), if you claimed ACRS depreciation
affiliations — Federal laws specifically
on your federal return for property not
• acid deposition control equipment,
exempt investment income from certain
classified as IRC section 280F property and
then include on line 9 the depreciation or
obligations of U.S. government agencies or
that property was placed in service outside
expenditure related to these items that was
affiliations from federal taxation but not from
New York State in tax years beginning after
deducted for federal tax purposes. See
state taxation.
December 31, 1984, but before January 1,
subtraction S-13.
If the partnership received or was credited
1994 (including property on which ACRS
A-9 Percentage depletion — If the
with any interest or dividend income from any
depreciation was figured in accordance with
partnership claimed a deduction on its federal
United States authority, commission, or
the Federal Tax Reform Act of 1986), you may:
return for percentage depletion on mines, oil
instrumentality that federal laws exempt from
• continue using the pre-1981 IRC
and gas wells, and other natural deposits,
federal income tax but do not exempt from
section 167 depreciation on that property,
then include on line 9 the deduction. See
state income tax, then include that income on
making the applicable depreciation addition
subtraction S-12.
line 9.
and subtraction; or
A-10 New business investment; deferral
A-5 Interest expense on loans used to
• choose to switch to the IRC section 168
recognition — If in any tax year beginning on
buy obligations exempt from New York
depreciation deduction.
or after January 1, 1982, and before 1988, the
State tax, amortized bond premium on
partners chose to subtract all or a portion of a
bonds that are exempt from New York tax,
A taxpayer choosing to switch to the IRC
partnership long-term capital gain from their
and other expenses relating to the
section 168 depreciation deduction is no
federal adjusted gross incomes because that
production of income exempt from
longer required to make the New York
amount had been reinvested by the
New York State tax
depreciation addition and subtraction
partnership in a new New York business, and
(a) If the partnership’s federal ordinary
adjustments, since you will now be allowed to
if that reinvestment was sold in the current tax
income includes a deduction for interest
year, then include on line 9 the amount that
claim the same depreciation as was claimed
expense used to buy bonds, obligations, or
had previously been subtracted.
securities whose interest income is
on the federal tax return for property placed in
taxable for federal purposes but exempt
service outside New York State in tax years
A-11 Deductions attributable to safe
from New York State tax, then include that
1985 through 1993. If you switch to IRC
harbor leases (such a lease is a financial
expense on line 9.
section 168 depreciation, you must use IRC
arrangement between either a corporation,
(b) If the partnership’s ordinary income
section 168 depreciation from this tax year
partnership, or certain grantor trusts and a
includes a deduction for the amortization
person, firm, estate, or trust to acquire and
forward, and must use it for all of your subject
of bond premiums on bonds whose
use an asset; the arrangement is allowed for
property. For more information concerning this
interest income is taxable for federal
federal tax purposes, but is not allowed for
property, see TSB-M-99(1)I. This TSB-M is
purposes but exempt from New York State
state purposes unless it involves mass transit
available on the Tax Department Web site at
tax, then include that interest expense on
vehicles) — If in figuring its federal ordinary
line 9.
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