N.Y. GCM Law § 14

§ 14. Ascertainment of gain or loss. 1. For the purpose of\nascertaining the gain derived or loss sustained from the sale or other\ndisposition of property, real, personal or mixed, the basis shall be the\ncost thereof, or the inventoried value if the inventory is made in\naccordance with section seventeen of this part.\n 2. Notwithstanding subdivision one of this section, with respect to\ngain derived from the sale or other disposition of any property acquired\nprior to January first, nineteen hundred sixty-six, except stock in\ntrade of the taxpayer or other property of a kind which would properly\nbe included in the inventory of the taxpayer if on hand at the close of\nthe taxable year, or property held by the taxpayer primarily for sale to\ncustomers in the ordinary course of its trade or business, and accounts\nor notes receivable acquired in the ordinary course of trade or business\nfrom the sale of such stock in trade or property, or for services\nrendered, net income shall not include\n (a) That portion of the gain included in determining net income\npursuant to subdivision one of this section with respect to each such\nproperty, which exceeds\n (b) The amount of gain that would be included in determining net\nincome pursuant to subdivision one of this section with respect to each\nsuch property if the basis of such property on the date of sale or other\ndisposition were equal to its fair market value on January first,\nnineteen hundred sixty-six, plus or minus all adjustments to basis made\nwith respect to each such property in computing net income for periods\non or after January first, nineteen hundred sixty-six;\nprovided that the total adjustment to net income provided by this\nsubdivision shall not exceed the amount of the taxpayer's net gain from\nthe sale or other disposition of all such property, as determined\npursuant to subdivision one of this section.\n 3. In the case of any bond, with respect to which a deduction for\namortizable bond premium is allowable under subdivision nine of section\ntwenty-one of this part, the basis for determining gain or loss shall be\nreduced by the total amount of such deductions so allowable.\n