139.5 Character of items.

Tax Law, § 639(a)(3)(B) Each of the estate or trust items of income, gain, loss or deduction has the same character for New York State personal income tax purposes as for Federal income tax purposes. Where an item is not characterized for Federal income tax purposes, the item shall have the same character as if realized directly from the source from which realized by the estate or trust, or incurred in the same manner as incurred by the estate or trust. The same is true if an estate or trust item is not required to be taken into account for Federal tax purposes (such as interest on bonds of the State of California).