Court Opinions

State Laws

US Code

US Constitution

New York Tax - Part 3 - § 631 New York Source Income of a Nonresident Individual

Legal Research Home > New York Laws > Tax > New York Tax - Part 3 - § 631 New York Source Income of a Nonresident Individual

 
    §  631.  New  York  source  income  of  a  nonresident individual. (a)
  General.  The New York source income of a nonresident  individual  shall
  be  the  sum  of  the  following: (1) The net amount of items of income,
  gain, loss and  deduction  entering  into  his  federal  adjusted  gross
  income,  as  defined  in  the  laws of the United States for the taxable
  year, derived from or connected with New York  sources,  including:  (A)
  his  distributive share of partnership income, gain, loss and deduction,
  determined under section six hundred thirty-two, and
    (B) his pro rata share of New York  S  corporation  income,  loss  and
  deduction, increased by reductions for taxes described in paragraphs two
  and three of subsection (f) of section thirteen hundred sixty-six of the
  internal  revenue code, determined under section six hundred thirty-two,
  and
    (C) his share of estate or trust income,  gain,  loss  and  deduction,
  determined under section six hundred thirty-four and
    (2)  The portion of the modifications described in subsections (b) and
  (c) of section six hundred twelve which relate to  income  derived  from
  New  York  sources (including any modifications attributable to him as a
  partner or shareholder of a New York S corporation).
    (b) Income and deductions from New York sources.
    (1) Items  of  income,  gain,  loss  and  deduction  derived  from  or
  connected with New York sources shall be those items attributable to:
    (A)  the  ownership  of  any  interest  in  real  or tangible personal
  property in this state; or
    (1) For purposes of this subparagraph, the term "real property located
  in this state" includes an interest in a partnership, limited  liability
  corporation,  S  corporation,  or non-publicly traded C corporation with
  one hundred or fewer shareholders (hereinafter the "entity")  that  owns
  real  property  that  is located in New York and has a fair market value
  that equals or exceeds fifty percent of all the assets of the entity  on
  the  date  of sale or exchange of the taxpayer's interest in the entity.
  Only those assets that the entity owned for at least  two  years  before
  the  date  of  the  sale  or  exchange of the taxpayer's interest in the
  entity are to be used in determining the fair market value  of  all  the
  assets  of  the entity on the date of sale or exchange. The gain or loss
  derived from New York sources from the taxpayer's sale or exchange of an
  interest in an  entity  that  is  subject  to  the  provisions  of  this
  subparagraph  is  the total gain or loss for federal income tax purposes
  from that sale or exchange multiplied by a fraction,  the  numerator  of
  which  is the fair market value of the real property located in New York
  on the date of sale or exchange and the denominator of which is the fair
  market value of all the assets of the entity on  the  date  of  sale  or
  exchange.
    (B)  a  business,  trade,  profession or occupation carried on in this
  state; or
    (C) in the case of  a  shareholder  of  an  S  corporation  where  the
  election  provided for in subsection (a) of section six hundred sixty of
  this article is in effect,  the  ownership  of  shares  issued  by  such
  corporation,   to  the  extent  determined  under  section  six  hundred
  thirty-two of this article; or
    (D) winnings from a  wager  placed  in  a  lottery  conducted  by  the
  division  of  the  lottery,  if the proceeds from such wager exceed five
  thousand dollars; or
    (E) gains from the sale, conveyance or other disposition of shares  of
  stock  in a cooperative housing corporation in connection with the grant
  or transfer of a proprietary leasehold by the owner thereof and  subject
  to  the  provisions  of article thirty-one of this chapter, whether such
  shares are held by a partnership, trust or otherwise; or

    (E-1) in the case of an S corporation for  which  an  election  is  in
  effect  pursuant  to subsection (a) of section six hundred sixty of this
  article that terminates its taxable status in New York,  any  income  or
  gain  recognized  on  the  receipt  of payments from an installment sale
  contract  entered  into when the S corporation was subject to tax in New
  York, allocated in a manner consistent with the applicable  methods  and
  rules for allocation under article nine-A or thirty-two of this chapter,
  in the year that the S corporation sold its assets.
    (F)  income  received  by  nonresidents  related to a business, trade,
  profession or occupation previously carried on in this state, whether or
  not as an employee, including but  not  limited  to,  covenants  not  to
  compete  and  termination  agreements.  Income  received by nonresidents
  related to  a  business,  trade,  profession  or  occupation  previously
  carried on partly within and partly without the state shall be allocated
  in accordance with the provisions of subsection (c) of this section.
    (2)  Income  from  intangible  personal property, including annuities,
  dividends, interest,  and  gains  from  the  disposition  of  intangible
  personal property, shall constitute income derived from New York sources
  only  to  the  extent  that  such  income is from property employed in a
  business, trade, profession, or occupation carried on in this  state  or
  from winnings from a wager placed in a lottery conducted by the division
  of  the  lottery,  if  the proceeds from such wager exceed five thousand
  dollars. Income from the disposition  of  intangible  personal  property
  shall also constitute income derived from New York sources to the extent
  such  gains are from the sale, conveyance or other disposition of shares
  of stock in a cooperative housing corporation  in  connection  with  the
  grant  or  transfer  of a proprietary leasehold by the owner thereof and
  subject to the provisions of article thirty-one of this chapter, whether
  such shares are held by a partnership, trust or otherwise.
    (3) Income directly or indirectly derived by an athlete,  entertainer,
  or   performing   artist   from   closed-circuit  and  cable  television
  transmissions of an event (other than events occurring  on  a  regularly
  scheduled  basis)  taking  place  within  the  state  as a result of the
  rendition of services by such athlete, entertainer or performing  artist
  shall constitute income derived from New York sources only to the extent
  that such transmissions were received or exhibited within the state.
    (4) Deductions with respect to capital losses, passive activity losses
  and net operating losses shall be based solely on income, gain, loss and
  deduction  derived  from  or  connected  with  New  York  sources, under
  regulations of the commissioner of taxation and finance,  but  otherwise
  shall  be  determined  in  the  same manner as the corresponding federal
  deductions.
    (5)  In  the  case  of  a  nonresident  individual  or  partner  of  a
  partnership  doing  an  insurance  business  as a member of the New York
  insurance exchange described in section six thousand two hundred one  of
  the  insurance  law, any item of income, gain, loss or deduction of such
  business which is the individual's distributive or pro  rata  share  for
  federal  income tax purposes or which the individual is required to take
  into account separately for  federal  income  tax  purposes,  shall  not
  constitute  income,  gain,  loss  or  deduction  derived  from  New York
  sources.
    (6) The deduction allowed  by  section  two  hundred  fifteen  of  the
  internal  revenue  code,  relating  to  alimony,  shall not constitute a
  deduction derived from New York sources.
    (c) Income and deductions partly from New York sources. If a business,
  trade, profession or occupation is carried on partly within  and  partly
  without   this  state,  as  determined  under  regulations  of  the  tax
  commission, the items of income, gain, loss and deduction  derived  from

  or  connected with New York sources shall be determined by apportionment
  and allocation under such regulations.
    (d)  Purchase  and sale for own account.-- A nonresident, other than a
  dealer holding property primarily for sale to customers in the  ordinary
  course  of  his  trade  or  business,  shall not be deemed to carry on a
  business, trade, profession or occupation in this state solely by reason
  of the purchase and sale of property or the purchase, sale or writing of
  stock option contracts, or both, for his own account.
    (e) Military pay. Compensation paid by the United  States  for  active
  service  in  the  armed  forces  of  the  United States, performed by an
  individual not domiciled in this  state,  shall  not  constitute  income
  derived from New York sources.
    (f)  Husband  and  wife.  If  husband and wife determine their federal
  income tax on a joint return but are required  to  determine  their  New
  York income taxes separately, they shall determine their New York source
  incomes  separately  as if their federal adjusted gross incomes had been
  determined separately.
    (g) Stock option grants,  stock  appreciation  rights  and  restricted
  stock.    A  nonresident  taxpayer  who has been granted statutory stock
  options,  restricted  stock,  nonstatutory  stock   options   or   stock
  appreciation rights and who, during such grant period, performs services
  within  New York for, or is employed within New York by, the corporation
  granting such option, stock or right, shall compute his or her New  York
  source  income  as  determined under rules and regulations prescribed by
  the commissioner.

Last modified: February 18, 2012