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\nsources. (a) General. The share of a nonresident beneficiary of any\nestate or trust under subsection (a) of section six hundred thirty-one,\nin estate or trust income, gain, loss and deduction from New York\nsources shall be determined as follows:\n (1) Items of distributable net income from New York sources. There\nshall be determined the items of income, gain, loss and deduction,\nderived from or connected with New York sources, which enter into the\ndefinition of federal distributable net income of the estate or trust\nfor the taxable year (including such items from another estate or trust\nof which the first estate or trust is a beneficiary). Such determination\nof source shall be made in accordance with the applicable rules of\nsection six hundred thirty-one as in the case of a nonresident\nindividual.\n (2) Addition or subtraction of modifications. There shall be added or\nsubtracted (as the case may be) the modifications described in section\nsix hundred eighteen, to the extent relating to the items of income,\ngain, loss and deduction derived from or connected with New York sources\nas determined under paragraph one of this subsection. No modification\nshall be made under this subsection which has the effect of duplicating\nan item already reflected in the definition of federal distributable net\nincome.\n (3) Allocation among beneficiaries. (A) The amounts determined under\nparagraphs one and two shall be allocated among the beneficiaries (and\nincluding, solely for the purpose of this allocation, among the estate\nor trust and resident beneficiaries) in proportion to their respective\nshares of federal distributable net income.\n (B) The amounts so allocated shall have the same character under this\narticle as for federal income tax purposes. Where an item entering into\nthe computation of such amounts is not characterized for federal income\ntax purposes, it shall have the same character as if realized directly\nfrom the source from which realized by the estate or trust, or incurred\nin the same manner as incurred by the estate or trust.\n (b) Alternate methods of determining shares.\n (1) If the estate or trust has no federal distributable net income for\nthe taxable year, the share of each beneficiary (including, solely for\nthe purpose of this allocation, resident beneficiaries) in the net\namount determined under paragraphs one and two of subsection (a) shall\nbe in proportion to the beneficiary's share of the estate or trust\nincome for such year, under local law or the governing instrument, which\nis required to be distributed currently and any other amounts of such\nincome distributed in such year. Any balance of such net amount shall be\nallocated to the estate or trust.\n (2) The commissioner may by regulation establish such other method or\nmethods of determining the respective shares of the beneficiaries and of\nthe estate or trust in its income derived from New York sources, and in\nthe modifications related thereto, as may be appropriate and equitable.\nSuch method may be used by the fiduciary in his discretion whenever the\nallocation of such respective shares under subsection (a) or paragraph\none of subsection (b) would result in an inequity which is substantial\nboth in amount and in relation to the total amount of the modifications\nreferred to in paragraph two of subsection (a).\n