Instructions For Form Nyc-202 - Unincorporated Business Tax Return

Instructions for Form NYC-202 2006

Page 4

BUSINESS CARRIED ON BOTH INSIDE

accounting is changed for federal income tax

this form if, on your federal return: (i) you

AND OUTSIDE NEW YORK CITY

purposes, the same changes must be made for

reported bonus depreciation and/or a first

If business is carried on both inside and out-

purposes of the Unincorporated Business Tax.

year expense deduction under IRC §179 for

side New York City, a fair and equitable por-

"qualified New York Liberty Zone proper-

tion of the business income must be allocated

PENALTIES

ty," "qualified New York Liberty Zone

to New York City. Otherwise, all of the busi-

The law imposes penalties for failure to file a

leasehold improvements," or "qualified

ness income must be allocated to New York

return or to pay any tax when due, or for mak-

Resurgence Zone property," regardless of

City. (Refer to the instructions on page 9 for

ing, rendering, signing, certifying or filing a

whether you are required to file form NYC-

Schedule C, Business Allocation)

false or fraudulent return. The mere fact that

399Z, (ii) you claimed a federal targeted

the figures reported on Form NYC-202 are

jobs credit for Liberty Zone business

BUSINESS TERMINATED DURING

taken from the federal return will not relieve

employees, or (iii) you replaced property

TAXABLE YEAR

the taxpayer from the imposition of penalties

involuntarily converted as a result of the

If the business was terminated during 2006,

because of negligence or for filing a false or

attacks on the World Trade Center during

attach a statement to Form NYC-202 showing

fraudulent return.

the five (5) year extended replacement peri-

disposition of the business property and how it

od. You must attach Federal forms 4562,

was reported on the return. Check the box on

TAX PREPARERS

4684, 4797 and 8884 to this return.

See

page 1 of the return.

Anyone who prepares a return for a fee must sign

instructions for Schedule B, lines 10d, 15 and

the return as a paid preparer and enter his or her

16 for more information.

USE OF FEDERAL FIGURES

Social Security Number or PTIN. Include the

SCHEDULE A

Except where otherwise indicated, items of

company or corporation name and Employer

Computation of Tax

business income, gain, loss or deduction are to

Identification Number, if applicable.

be entered on the return as reportable for fed-

LINE 1 - BUSINESS INCOME

Preparer Authorization:

If you want to

eral tax purposes. All items reported on Form

Enter on line 1 the total from page 2, Schedule

allow the Department of Finance to discuss

NYC-202 or on attachments to it, however, are

B, line 28.

your return with the paid preparer who signed

subject to verification, audit and revision by

it, you must check the "yes" box in the signa-

the Department of Finance.

LINE 2 - BUSINESS ALLOCATION

ture area of the return. This authorization

PERCENTAGE

applies only to the individual whose signature

FEDERAL OR NEW YORK

Taxpayers not allocating income should enter

appears in the "Preparer's Use Only" section

STATE CHANGES

100% on line 2, then complete lines 4 and 5.

of your return. It does not apply to the firm, if

If, on audit of your return, the federal or New

any, shown in that section. By checking the

For tax years beginning on or after January 1,

York State tax authorities change any item of

"Yes"

box,

you

are

authorizing

the

2005, except as provided below, taxpayers

income or deduction reported to the Internal

Department of Finance to call the preparer to

must allocate business income using the for-

Revenue Service or the New York State

answer any questions that may arise during the

mula method. However, taxpayers who used

Department of Taxation and Finance, or an

the books and records method for the two

processing of your return.

Also, you are

item of income or deduction is changed as a

authorizing the preparer to:

immediately preceding tax years, which must

result of a renegotiation of a contract with the

have consisted of 12 months each, may make

Give the Department any information

United States or New York State, or you exe-

a one-time election to continue using the

missing from your return,

cute a waiver of the restrictions on assessment

books and records allocation method for each

by either authority under IRC section 6213(d)

Call the Department for information

tax year beginning on and after January 1,

or NYS Tax Law section 681(f) and the

about the processing of your return or the

2005 and before January 1, 2012. See, instruc-

change pertains to the unincorporated business

status of your refund or payment(s), and

tions for Schedule C for more information.

income or deductions reported on the

Taxpayers allocating income using the statuto-

Unincorporated Business Tax return, you must

Respond to certain notices that you have

ry formula should determine the business allo-

report the change to the Department of

shared with the preparer about math

cation percentage to be used here by complet-

Finance within 90 days.

Form NYC-115

errors, offsets, and return preparation.

ing Schedule C, parts 1, 2 and 3. Transfer the

should be used for this purpose and may be

The notices will not be sent to the prepar-

percentage entered on Schedule C, part 3, line

obtained from the sources listed in these

er.

5 to line 2 of this schedule rounded to the near-

instructions.

You are not authorizing the preparer to receive

est one hundredth of a percentage point and

any refund check, bind you to anything (includ-

Form NYC-115 must be filed separately and

check ( ) the “formula” box.

ing any additional tax liability), or otherwise

should not be attached to any return.

represent you before the Department.

The

Eligible taxpayers electing to continue to allo-

If an amended federal or New York State return

authorization cannot be revoked, however, the

cate income on the basis of business books and

is filed reflecting a change in unincorporated

authorization will automatically expire no later

records should mark “yes” on the box on the

business income or deductions, an amended

than the due date (without regard to any exten-

top of page 1 and check ( ) the second box on

Unincorporated Business Tax return must be

sions) for filing next year's return. Failure to

line 2 of Schedule A. They should then pro-

filed within 90 days. Use Form NYC-202 and

check the box will be deemed a denial of

ceed to omit the percentage on line 2, disre-

check the box at the top of page 1.

gard lines 3 through 6, and continue with line

authority.

7. Enter on line 10 the sum of lines 1 and 9.

ACCOUNTING PERIODS AND

Taxpayers allocating income on the basis of an

METHODS

SPECIFIC INSTRUCTIONS

alternative method of allocation must com-

The accounting period for which Form NYC-

If this is an amended return, check the box

plete Schedule C, parts 1, 2 and 3 and attach an

202 is filed and the method of accounting used

on page 1 of the return.

explanation of the alternative method. If a

are the same as for federal income tax purpos-

percentage formula is used other than the

Check the box marked "yes" on page 1 of

es. If a taxpayer’s taxable year or method of

Instructions For Form Nyc-202 - Unincorporated Business Tax Return - 2006 Page 4

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