N.Y. GCM Law § 109

§ 109. Unincorporated business exemptions. In computing unincorporated\nbusiness taxable income, there shall be allowed (without allocation\nunder section one hundred seven):\n (1) an unincorporated business exemption of five thousand dollars,\nprorated for taxable years of less than twelve months under regulations\nof the director of finance;\n (2) if a partner in an unincorporated business is taxable under this\ntitle or under any local law imposed pursuant to section one of the act\nauthorizing the adoption of this title, an exemption for the amount of\nthe partner's proportionate interest in the excess of the unincorporated\nbusiness gross income over the deductions allowed under sections one\nhundred six and one hundred eight, but this exemption shall be limited\nto the amount which is included in the partner's unincorporated business\ntaxable income allocable to the city, or included in a corporate\npartner's net income allocable to the city.\n