N.Y. Tax Law § 639: Accruals upon change of residence

§ 639. Accruals upon change of residence. (a) If an individual changes

status from resident to nonresident he shall, regardless of his method

of accounting, accrue to the period of residence any items of income,

gain, loss, deduction, or ordinary income portion of a lump sum

distribution accruing prior to the change of status, with the applicable

modifications and adjustments to federal adjusted gross income and

itemized deductions under sections six hundred twelve and six hundred

fifteen, if not otherwise properly includible or allowable for New York

income tax purposes for such period or a prior taxable year under his

method of accounting.

(b) If an individual changes status from nonresident to resident he

shall, regardless of his method of accounting, accrue to the period of

nonresidence any items of income, gain, loss or deduction, or ordinary

income portion of a lump sum distribution accruing prior to the change

of status, with the applicable modifications and adjustments to federal

adjusted gross income and itemized deductions under sections six hundred

twelve and six hundred fifteen, other than items derived from or

connected with New York sources, if not otherwise properly includible or

allowable for New York income tax purposes for such period or for a

prior taxable year under his method of accounting.

(c) No item of income, gain, loss, deduction, ordinary income portion

of a lump sum distribution or modification or adjustment which is

accrued under this section shall be taken into account in determining

the tax under this article for any subsequent taxable year.

(d) The accruals under this section shall not be required if the

individual files with the commissioner a bond or other security

acceptable to the commissioner, on condition that the amounts accruable

under this section are taken into account in determining the tax under

this article for one or more subsequent taxable years as if the

individual had not changed his resident status.

(e) The foregoing provisions of this section shall apply if an

individual changes his or her status from a resident to nonresident or

from a nonresident to resident during a taxable year, or at the

beginning of a taxable year, as a result of a change of domicile or as a

result of becoming a resident or nonresident based on the definition

contained in subsection (b) of section six hundred five of this article.

(f) Except as hereinafter provided, where an individual who is a

member of a partnership or a shareholder of an S corporation changes

status from resident to nonresident, or from nonresident to resident,

the portion of the distributive or pro rata share of income, gain and

loss (less deductions attributable thereto) from a partnership or S

corporation shall be allocated to the resident and nonresident periods

of the partner or shareholder on a proportionate basis throughout the

taxable year of the partnership or S corporation. In such event, the

portion of the distributive or pro rata share allocated to the period of

residency shall be determined based on the number of days of residency

within the reporting period of the partnership or S corporation over the

total number of days in the reporting period of the partnership or S

corporation. Provided, however, that the commissioner may require, or

the individual may elect, to accrue to the period of residence, and the

period of nonresidence, the portion of the distributive or pro rata

share of partnership or S corporation income, gain and loss (less

deductions attributable thereto) accruing during the individual's

respective resident and nonresident periods in a manner that reflects

the date of accrual of said income, gain and loss by the partnership or

S corporation.

(g) Except as hereinafter provided, where an individual who is

beneficiary of an estate or trust changes status from resident to

nonresident, or from nonresident to resident, the portion of any estate

or trust income credited, distributable, payable or required to be

distributed to such beneficiary shall be allocated to the resident and

nonresident periods of the beneficiary on a proportionate basis

throughout the taxable year of the estate or trust. In such event, the

portion of such estate or trust income allocated to the period of

residency shall be determined based on the number of days of residency

within the reporting period of the estate or trust. Provided, however,

that the commissioner may require, or the beneficiary may elect, to

accrue to the period of residence, and the period of nonresidence, the

portion of such estate or trust income accruing during the beneficiary's

respective resident and nonresident periods in a manner that reflects

the date of accrual of said estate or trust income by the estate or

trust.

(h) If a trust changes its status from resident to nonresident or from

nonresident to resident, the provisions of subsections (a) through (f)

of this section shall apply except that the term "individual" shall be

read as "trust" and reference to "modifications" shall mean those

modifications described in section six hundred eighteen.