Allocation based on normal tax accounting rules.
(2) Allocation based on normal tax accounting rules. The portion of each S corporation item described in subdivision (a) of this section, shall be allocated to the S short year (as defined in section 208[1-A] of the Tax Law to mean the portion of the taxable year ending before the first day for which the S termination is effective) and the C short year (as defined in section 208[1-A] of the Tax Law to mean the portion of the taxable year beginning on the first day the New York S election terminates) using normal accounting rules if:
(i)there is a sale or exchange of 50 percent or more of the stock in such corporation during the New York S termination year (as defined in section 208[1-A] of the Tax Law to mean any taxable year of a corporation during which the New York S e#
(i) there is a sale or exchange of 50 percent or more of the stock in such corporation during the New York S termination year (as defined in section 208[1-A] of the Tax Law to mean any taxable year of a corporation during which the New York S election terminates on a day other than the first day of such year); or
(ii)the corporation elects to use normal tax accounting rules, where all persons who are shareholders in the corporation at any time during the New York S short year and all persons who are shareholders in the corporation on the first day of th#
(ii) the corporation elects to use normal tax accounting rules, where all persons who are shareholders in the corporation at any time during the New York S short year and all persons who are shareholders in the corporation on the first day of the New York C short year consent to such election. Such election shall be made by providing information that the department may require through forms and instructions.