117.4 Character of items.
Tax Law, § 617
(a)In order that the modifications may be properly applied to partnership items of income, gain, loss or deduction, whenever applicable, each of such partnership items must have the same character for a partner under the New York State persona#
(a) In order that the modifications may be properly applied to partnership items of income, gain, loss or deduction, whenever applicable, each of such partnership items must have the same character for a partner under the New York State personal income tax law as for Federal income tax purposes. Where an item is not characterized for Federal income tax purposes, the item must have the same character for a partner as if realized directly from the source from which realized by the partnership or incurred in the same manner as incurred by the partnership. If a partnership item is not required to be taken into account for Federal income tax purposes (such as interest on bonds of the State of California), the character of the item for a partner for New York State personal income tax purposes is the same as if such partner had realized or incurred the item directly.
(b)Where a partner is a member in a partnership, and such partnership (hereinafter referred to as the “upper tier partnership”) is a partner in another partnership (hereinafter referred to as the “ lower tier partnership”), the character of su#
(b) Where a partner is a member in a partnership, and such partnership (hereinafter referred to as the “upper tier partnership”) is a partner in another partnership (hereinafter referred to as the “ lower tier partnership”), the character of such member' s distributive share of each partnership item of the upper tier partnership which is attributable to the lower tier partnership retains the character determined at the level of the lower tier partnership using the provisions of subdivision (a) of this section. Such character is not changed by reason of the fact that such item flows through the upper tier partnership to such member.