In the case of a shareholder of an S corporation (see section 612[c][22] of the Tax Law):

(r) In the case of a shareholder of an S corporation (see section 612[c][22] of the Tax Law):

(1)#

(1)

(i) Where the election to be treated as a New York S corporation under section 660(a) of the Tax Law has not been made with respect to such corporation, any item of income of the S corporation included in Federal gross income pursuant to section 1366 of the Internal Revenue Code.

(ii) Exception. A resident shareholder of an S corporation that cannot make the election provided for under section 660(a) of the Tax Law ( e.g., a foreign S corporation [ i.e., an S corporation that is not incorporated in New York State] that does not do business in New York State or an S corporation that is taxed under article 9 of the Tax Law), cannot make the modification referred to in this paragraph.

(1)(i)Where the election to be treated as a New York S corporation under section 660(a) of the Tax Law has not been made with respect to such corporation, any item of income of the S corporation included in Federal gross income pursuant to sectio#

(1)(ii)Exception.#

(2)In the case of an S termination year, paragraph (1) of this subdivision shall apply to the amounts of income determined under section 612(s) of the Tax Law (see section 112.12 of this Part).#

(2) In the case of an S termination year, paragraph (1) of this subdivision shall apply to the amounts of income determined under section 612(s) of the Tax Law (see section 112.12 of this Part).