N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 3-4.8

Current through Register Vol. 46, No. 51, December 18, 2024

Section 3-4.8 - Safe harbor reduction election

(Tax Law, section 208(6) and (6-a))

(a) In lieu of performing the attribution of interest deductions in section 3-4.7 of this Subpart, a corporation may elect to reduce the amount of gross investment income, gross exempt CFC income, and gross exempt other unitary corporation dividends by the safe harbor reduction amount, which is 40% of the respective gross income amount. If the corporation has gross exempt cross-article dividends, it must attribute interest deductions to such income using the methodology described in section 3-4.7 of this Subpart only as it relates to such exempt cross-article stock. In addition, the amounts of interest deductions directly attributable to gross investment income or investment capital, gross exempt CFC income, and gross exempt unitary corporation dividends are not subtracted from gross investment income, gross exempt CFC income, and gross exempt unitary corporation dividends, respectively.

(b) This election applies to gross investment income, gross exempt CFC income, and gross exempt other unitary corporation dividends. The absence of gross investment income, gross exempt CFC income, or gross exempt other unitary corporation dividends does not preclude the election being made.

(c) The election may be made or revoked by the taxpayer, or in the case of a combined group, the designated agent, by filing a tax return within the statute of limitations for each applicable tax year. Such method chosen by the taxpayer is binding on both the taxpayer and the department unless the taxpayer files an amended return within the statute of limitations for the applicable tax year to make a change.

N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 3-4.8

Adopted New York State Register December 27, 2023/Volume XLV, Issue 52, eff. 12/27/2023