Instructions For Form Nyc-204 -Partnership Return

Instructions for Form NYC-204 - 2010

Page 2

GENERAL INFORMATION

Unincorporated Business Tax for

transactions in positions in property, the

tax years beginning in 1995 that

acquisition, holding or disposition, other

elected to continue to be subject

than in the ordinary course of business, of

PARTNERSHIP DEFINED

to the Unincorporated Business

interests in unincorporated entities also el-

For purposes of this form, “partnerships” in-

Tax for years after 1995 on a

igible for this exemption, and any other

clude syndicates, groups, pools, joint ventures

timely filed Unincorporated Busi-

activity not constituting an unincorpo-

and limited liability companies and other un-

ness Tax return for tax year be-

rated business subject to the Unincorpo-

incorporated or incorporated organizations

ginning in 1996 continue to be

rated Business Tax.

classified as partnerships for federal income

subject to the Unincorporated

tax purposes, through or by means of which

Property Defined. Property for this pur-

Business Tax.

any business, profession, financial operation or

pose includes real and personal property,

venture is carried on. An estate or trust is not

any entity subject to the tax im-

including property qualifying as invest-

a partnership.

posed by Title 11, Chapter 11

ment capital (see instructions for Sched-

(Utility Tax) of the NYC Admin-

ule D of this form), and other stocks and

WHO MUST FILE

istrative Code (except that ven-

securities, notional principal contracts,

For tax years beginning in 2009 or later, any

dors of utility services are subject

derivative financial instruments and other

partnership that carries on or liquidates any

to the unincorporated business tax

positions in property but excluding prop-

trade, business, profession or occupation wholly

on that percentage of their entire

erty and positions in property held by a

or partly within New York City and has a total

net income allocable to the City

dealer, and excluding debt instruments ac-

gross income from all business regardless of

which their non-utility receipts

quired in the ordinary course of a trade or

where carried on of more than $95,000 (prior

bear to their total receipts);

business and certain other property. See

to any deduction for cost of goods sold or serv-

Admin. Code §11-502(c)(i)(A).

ices performed) must file an Unincorporated

any entity carrying on an insurance

Business Tax Return on Form NYC-204.

business as a member of the New

Notwithstanding anything to the contrary,

York Insurance Exchange (autho-

the receipt of $25,000 or less of gross re-

Taxpayers that are required to file an Unincor-

rized in Section 6201 of the Insur-

ceipts during the taxable year (determined

porated Business Tax Return but have no tax

ance Law); or

without regard to deductions) from an un-

liability may be eligible to file a Form NYC-

incorporated business will not disqualify

204 EZ. To determine whether you may use

Real Estate Mortgage Investment

the taxpayer for this exemption.

Form NYC-204 EZ refer to that form. The

Conduit (REMICs). Holders of in-

Form NYC-204 EZ may also be used by a part-

terests in a REMIC remain taxable

Partial Exemption for Investment Activi-

nership that is not required to file but wishes to

on such interests or on the income

ties: (Admin Code §11-502(c)(4)) For tax-

disclaim any liability for tax because it is en-

from such interests.

able years beginning after 1995, if a

gaged solely in activities that are exempt from

taxpayer is an unincorporated entity (not an

Wireless Telecommunications Serv-

the tax.

individual) and is primarily engaged in

ice Providers

the activities described above under

WHO IS SUBJECT TO THE TAX

Effective for tax periods beginning

“Full Exemption for Investment Ac-

The Unincorporated Business Tax is im-

on and after August 1, 2002, enti-

tivities ”or

posed on any individual or unincorporated

ties that receive eighty percent or

entity (including a partnership, fiduciary

more of their gross receipts from

the ownership as an investor of in-

or corporation in liquidation) engaged in

charges

for

providing

mobile

terests in one or more other unincor-

any trade, business, profession, or occu-

telecommunications services to

porated entities engaged in an

pation wholly or partly carried on within

customers will be taxed as if they

unincorporated business in the City.

New York City.

were regulated utilities for pur-

The taxpayer’s own activities described

poses of the New York City Utility

Income received from the practice of law,

at (1) and the activities of any other un-

Tax and Unincorporated Business

medicine, dentistry, architecture, or any

incorporated entity primarily engaged in

Tax. Thus, such entities will be

other profession is subject to the unincor-

the activities described at (1) and (2) in

subject to only the New York City

porated business tax.

which the taxpayer holds an interest will

Utility Tax. The amount of gross

not be considered an unincorporated

S corporations are not subject to the Un-

income subject to tax has been

business carried on by the taxpayer and

incorporated Business Tax. S Corpora-

amended to conform to the Federal

the income from those activities will not

tions

are

subject

the

General

Mobile

Telecommunications

be subject to the tax.

Corporation Tax.

Sourcing Act of 2000. In addition,

for tax years beginning on and

The Unincorporated Business Tax does

A taxpayer will be considered to be pri-

after August 1, 2002, partners in

not apply to:

marily engaged in the activities de-

any partnership subject to the Util-

scribed at (1) and (2) if at least 90 percent

ity Tax as a “utility” as defined in

any entity subject to the tax im-

of the average monthly gross value of its

Ad. Code section 11-1101(6) will

posed by Title 11, Chapter 6 (Gen-

total assets consists of:

not be subject to Unincorporated

eral Corporation Tax) of the NYC

Business Tax on their distributive

property as defined above,

Administrative Code. For taxable

share of the income of any such en-

years beginning in 1996 and there-

interests in unincorporated enti-

tity.

after, unincorporated associations

ties not engaged in any unincor-

and publicly-traded partnerships

Full Exemption for Investment Activi-

porated business in the City, and

taxable as corporations for federal

ties: A partnership, except a dealer as de-

interests held as an investor in

income tax purposes under IRC

fined in Admin. Code §11-501(l), will not

entities engaged in an unincor-

§7701(a) (3) and §7704 are subject

be deemed engaged in an unincorporated

porated business in the City.

to the General Corporation Tax and

business solely by reason of the conduct

not the Unincorporated Business

For this purpose, real property and mar-

of the following activities for its own ac-

Tax.

However, unincorporated

count: the purchasing, holding or selling

ketable securities are valued at their fair

entities that were subject to the

market value and all other assets are val-

of property (defined below), engaging in

Instructions For Form Nyc-204 -Partnership Return - 2010 Page 3

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