N.Y. GCT Law § 17

§ 17. Resident partners.--(a) Partner's modifications.--In determining\ncity adjusted gross income and city taxable income of a resident\npartner, any modification described in subdivisions (b), (c) or (d) of\nsection twelve, subdivision (c) of section fifteen or paragraphs two or\nthree of subdivision (d) of such section, which relates to an item of\npartnership income, gain, loss or deduction shall be made in accordance\nwith the partner's distributive share, for federal income tax purposes,\nof the item to which the modification relates. Where a partner's\ndistributive share of any such item is not required to be taken into\naccount separately for federal income tax purposes, the partner's\ndistributive share of such item shall be determined in accordance with\nhis distributive share, for federal income tax purposes, of partnership\ntaxable income or loss generally.\n (b) Character of items.--Each item of partnership income, gain, loss,\nor deduction shall have the same character for a partner under this\nlocal law as for federal income tax purposes. Where an item is not\ncharacterized for federal income tax purposes, it shall have the same\ncharacter for a partner as if realized directly from the source from\nwhich realized by the partnership or incurred in the same manner as\nincurred by the partnership.\n (c) City tax avoidance or evasion.--Where a partner's distributive\nshare of an item of partnership income, gain, loss or deduction is\ndetermined for federal income tax purposes by special provision in the\npartnership agreement with respect to such item, and where the principal\npurpose of such provision is the avoidance or evasion of tax under this\nlocal law, the partner's distributive share of such item, and any\nmodification required with respect thereto, shall be determined as if\nthe partnership agreement made no special provision with respect to such\nitem.\n