N.Y. Tax Law § 634: Share of a nonresident beneficiary in income from New York sources

§ 634. Share of a nonresident beneficiary in income from New York

sources. (a) General. The share of a nonresident beneficiary of any

estate or trust under subsection (a) of section six hundred thirty-one,

in estate or trust income, gain, loss and deduction from New York

sources shall be determined as follows:

(1) Items of distributable net income from New York sources. There

shall be determined the items of income, gain, loss and deduction,

derived from or connected with New York sources, which enter into the

definition of federal distributable net income of the estate or trust

for the taxable year (including such items from another estate or trust

of which the first estate or trust is a beneficiary). Such determination

of source shall be made in accordance with the applicable rules of

section six hundred thirty-one as in the case of a nonresident

individual.

(2) Addition or subtraction of modifications. There shall be added or

subtracted (as the case may be) the modifications described in section

six hundred eighteen, to the extent relating to the items of income,

gain, loss and deduction derived from or connected with New York sources

as determined under paragraph one of this subsection. No modification

shall be made under this subsection which has the effect of duplicating

an item already reflected in the definition of federal distributable net

income.

(3) Allocation among beneficiaries. (A) The amounts determined under

paragraphs one and two shall be allocated among the beneficiaries (and

including, solely for the purpose of this allocation, among the estate

or trust and resident beneficiaries) in proportion to their respective

shares of federal distributable net income.

(B) The amounts so allocated shall have the same character under this

article as for federal income tax purposes. Where an item entering into

the computation of such amounts is not characterized for federal income

tax purposes, it shall have the same character as if realized directly

from the source from which realized by the estate or trust, or incurred

in the same manner as incurred by the estate or trust.

(b) Alternate methods of determining shares.

(1) If the estate or trust has no federal distributable net income for

the taxable year, the share of each beneficiary (including, solely for

the purpose of this allocation, resident beneficiaries) in the net

amount determined under paragraphs one and two of subsection (a) shall

be in proportion to the beneficiary's share of the estate or trust

income for such year, under local law or the governing instrument, which

is required to be distributed currently and any other amounts of such

income distributed in such year. Any balance of such net amount shall be

allocated to the estate or trust.

(2) The commissioner may by regulation establish such other method or

methods of determining the respective shares of the beneficiaries and of

the estate or trust in its income derived from New York sources, and in

the modifications related thereto, as may be appropriate and equitable.

Such method may be used by the fiduciary in his discretion whenever the

allocation of such respective shares under subsection (a) or paragraph

one of subsection (b) would result in an inequity which is substantial

both in amount and in relation to the total amount of the modifications

referred to in paragraph two of subsection (a).