Section 1503. Computation of entire net income

(a) The entire net income of
  a taxpayer shall be its total net income from all sources which shall be
  presumably  the same as the life insurance company taxable income (which
  shall include, in the case of a stock life insurance company  which  has
  an  existing  policyholders  surplus  account,  the amount of direct and
  indirect distributions during the taxable year to shareholders from such
  account), taxable income of a partnership or  taxable  income,  but  not
  alternative  minimum  taxable  income,  as  the  case  may be, which the
  taxpayer is required to report to the United States treasury department,
  for the taxable year or, in  the  case  of  a  corporation  exempt  from
  federal  income  tax  (other  than the tax on unrelated business taxable
  income imposed under section 511 of the internal revenue code)  but  not
  exempt  from  tax  under section fifteen hundred one, the taxable income
  which such taxpayer would have been required  to  report  but  for  such
  exemption, except as hereinafter provided.
    (b)  Modifications.  In  computing  entire  net  income, the following
  modifications shall be made:
    (1) Entire net income shall not include:
    * (A) income, gains and losses from subsidiary capital  which  do  not
  include the amount of a recovery in respect of any war loss;
    * NB Effective until January 1, 2011
    * (A)  income,  gains  and losses from subsidiary capital which do not
  include (i) the amount of a recovery in respect of  any  war  loss,  and
  (ii)  fifty  percent  of  disallowed investment proceeds as described in
  paragraph seventeen of this subdivision for taxable years  beginning  on
  or after January first, two thousand seven and before January first, two
  thousand  nine,  and  seventy-five percent of such disallowed investment
  proceeds for taxable years beginning on  or  after  January  first,  two
  thousand  nine  and  before  January first, two thousand eleven, and one
  hundred percent of such disallowed investment proceeds for taxable years
  beginning on or after January first, two thousand eleven;
    * NB Effective January 1, 2011
    * (B) fifty percent of dividends other than from  subsidiaries  except
  that  in  the  case of a life insurance company, such modification shall
  apply only with respect to the company's share of such dividends,  which
  share  means the percentage determined under paragraph one of subsection
  (a) of section eight hundred twelve of the internal revenue code;
    * NB Effective until January 1, 2011
    * (B) fifty percent of dividends (i)  other  than  from  subsidiaries,
  except subsidiaries whose dividends are described in subparagraph (E) of
  paragraph  seventeen  of  this  subdivision,  and  (ii) other than fifty
  percent of disallowed investment  proceeds  as  described  in  paragraph
  seventeen  of  this  subdivision for taxable years beginning on or after
  January first, two thousand seven and before January first, two thousand
  nine, and seventy-five percent of such  disallowed  investment  proceeds
  for taxable years beginning on or after January first, two thousand nine
  and  before  January first, two thousand eleven, and one hundred percent
  of such disallowed investment proceeds for taxable years beginning on or
  after January first, two thousand eleven, except that in the case  of  a
  life  insurance company, such modification shall apply only with respect
  to the  company's  share  of  such  dividends,  which  share  means  the
  percentage  determined  under paragraph one of subsection (a) of section
  eight hundred twelve of the internal revenue code;
    * NB Effective January 1, 2011
    (C) any refund or credit of  a  tax  imposed  under  this  article  or
  section  one  hundred  eighty-seven,  or  article  twenty-three  of this
  chapter heretofore in effect to the extent properly included  as  income
  for federal income tax purposes, for which no exclusion or deduction was

  allowed  in  determining  the  taxpayer's  entire  net income under this
  article for any prior year;
    (D) that portion of wages or salaries paid or incurred for the taxable
  year  for which a deduction is not allowed pursuant to the provisions of
  section two hundred eighty-C of the internal revenue code;
    (E) in the case of a taxpayer who is separately or as a partner  of  a
  partnership  doing  an  insurance  business  as a member of the New York
  insurance exchange described in section six thousand two hundred one  of
  the  insurance  law, any item of income, gain, loss or deduction of such
  business which is the taxpayer's distributive  or  pro  rata  share  for
  federal  income  tax  purposes or which the taxpayer is required to take
  into account separately for federal income tax purposes;
    (F) for taxable years beginning after December thirty-first,  nineteen
  hundred eighty-one, except with respect to property which is a qualified
  mass  commuting vehicle described in subparagraph (D) of paragraph eight
  of subsection (f) of section one hundred  sixty-eight  of  the  internal
  revenue code (relating to qualified mass commuting vehicles), any amount
  which  is  included  in the taxpayer's taxable income for federal income
  tax purposes solely as a result of an  election  made  pursuant  to  the
  provisions  of  such  paragraph eight as it was in effect for agreements
  entered into prior to January first, nineteen hundred eighty-four;
    (G) for taxable years beginning after December thirty-first,  nineteen
  hundred eighty-one, except with respect to property which is a qualified
  mass  commuting vehicle described in subparagraph (D) of paragraph eight
  of subsection (f) of section one hundred  sixty-eight  of  the  internal
  revenue code (relating to qualified mass commuting vehicles), any amount
  which  the  taxpayer  could  have  excluded  from its taxable income for
  federal income tax purposes had it not made the election provided for in
  such paragraph eight as it was in effect  for  agreements  entered  into
  prior to January first, nineteen hundred eighty-four;
    (H)   the   amount  deductible  pursuant  to  paragraph  ten  of  this
  subdivision;
    (I) upon the disposition of property to which paragraph  ten  of  this
  subdivision  applies,  the amount, if any, by which the aggregate of the
  amounts  described  in  subparagraph  (M)  of  paragraph  two  of   this
  subdivision  attributable  to such property exceeds the aggregate of the
  amounts described in paragraph ten of this subdivision  attributable  to
  such property;
    (J) the amount of unearned premiums on outstanding business at the end
  of  the  taxable  year  included  in  premiums  earned  pursuant  to the
  provisions of section 832(b)(4)(B) of the internal revenue code;
    (K) the amount of unearned premiums on outstanding business at the end
  of the  taxable  year  included  in  premiums  earned  pursuant  to  the
  provisions of section 832(b)(7)(B)(i) of the internal revenue code;
    (L)  the amount included in premiums earned pursuant to the provisions
  of section 832(b)(8)(A)(i) of the internal revenue  code  which  is  the
  difference  between  the  amount  of  discounted  unearned  premiums  on
  outstanding business at the end of the taxable year and  the  amount  of
  unearned  premiums  on  outstanding  business  at the end of the taxable
  year;
    (M) for taxable years beginning after December thirty-first,  nineteen
  hundred   eighty-six   and   before   January  first,  nineteen  hundred
  ninety-two, the amount of  unearned  premiums  on  outstanding  business
  included  in  premiums  earned  pursuant  to  the provisions of sections
  832(b)(4)(C) and 832(b)(7)(B)(ii) of the internal revenue code;
    (N)  the  amount  which  is  the  difference  between  the  amount  of
  discounted  unpaid  losses  at  the  end of the taxable year used in the
  computation of losses incurred pursuant to section 832(b)(5)(A)  of  the

  internal  revenue  code,  and  the amount of unpaid losses that would be
  used in such computation for the taxable year if such  losses  were  not
  discounted  pursuant to the provisions of section 846(a) of the internal
  revenue code;
    (O)  the  amount  by  which  losses  incurred  as  defined  in section
  832(b)(5)(A) of the internal revenue code are reduced in accordance with
  section 832(b)(5)(B) of such code; and
    (P) the amount included in federal gross income pursuant  to  sections
  847(5) and 847(6) of the internal revenue code.
    (Q)  The  amount  deductible  pursuant  to  paragraph  twelve  of this
  subsection.
    (R) for taxable  years  beginning  after  December  thirty-first,  two
  thousand  two,  the  amount deductible pursuant to paragraph fourteen of
  this subdivision.
    (2) Entire net income  shall  be  determined  without  the  exclusion,
  deduction or credit of:
    (A)  the amount of any specific exemption or credit allowed in any law
  of the United States imposing any tax on or measured by  the  income  of
  corporations;
    (B)  any  part of any income from dividends or interest on any kind of
  stock, securities or indebtedness, except as provided  in  subparagraphs
  (A) and (B) of paragraph one hereof;
    (C)  taxes  paid  or  accrued  to  the United States on or measured by
  income or premiums;
    (D) taxes imposed under this article;
    (E) In those instances where  a  credit  for  the  special  additional
  mortgage recording tax is allowed under paragraph one of subdivision (e)
  of section fifteen hundred eleven of this article, the amount allowed as
  an  exclusion or deduction for the special additional mortgage recording
  tax imposed by subdivision one-a of section two hundred  fifty-three  of
  this  chapter in determining the entire net income which the taxpayer is
  required to report to the United States  treasury  department  for  such
  taxable year;
    (F)  unless  the credit allowed pursuant to subdivision (e) of section
  fifteen hundred eleven of this article is reflected in  the  computation
  of  the  gain  or  loss  so  as to result in an increase in such gain or
  decrease in such loss, for federal income tax purposes, from the sale or
  other disposition of the property with  respect  to  which  the  special
  additional  mortgage recording tax imposed pursuant to subdivision one-a
  of section two hundred fifty-three of this chapter was paid, the  amount
  of  the special additional mortgage recording tax imposed by subdivision
  one-a of section two hundred fifty-three of this chapter which was  paid
  and  which  is reflected in the computation of the basis of the property
  so as to result in a decrease in such gain or increase in such loss  for
  federal  income  tax  purposes from the sale or other disposition of the
  property with respect to which such tax was paid;
    (G) ninety percent of interest on indebtedness directly or  indirectly
  owed  to  any  stockholder  or  shareholder (including subsidiaries of a
  corporate stockholder or  shareholder),  or  members  of  the  immediate
  family  of  an  individual  stockholder  or  shareholder,  owning in the
  aggregate in excess of five per centum of the issued  capital  stock  of
  the taxpayer, except that such interest may, in any event, be deducted
    (i) up to an amount not exceeding one thousand dollars,
    (ii) in full to the extent that it relates to bonds or other evidences
  of  indebtedness  issued,  with  stock,  pursuant to a bona fide plan of
  reorganization, to persons, who, prior to such reorganization, were bona
  fide creditors of the corporation or  its  predecessors,  but  were  not
  stockholders or shareholders thereof,

    (iii)  in  full  to the extent that it is paid to a federally licensed
  small business investment company;
    * (H)  in  the  discretion of the commissioner, any amount of interest
  directly or indirectly and any other amount directly attributable  as  a
  carrying  charge  or otherwise to subsidiary capital or to income, gains
  or losses from subsidiary capital;
    * NB Effective until January 1, 2011
    * (H) in the discretion of the commissioner, any  amount  of  interest
  directly  or  indirectly and any other amount directly attributable as a
  carrying charge or otherwise to subsidiary capital or to  income,  gains
  or  losses  from  subsidiary  capital,  except  to  the extent that such
  amounts are  directly  or  indirectly  attributable  to  (i)  subsidiary
  capital,  the  income,  gains or losses from which are not excluded from
  entire net income pursuant to subparagraph (A) of paragraph one of  this
  subdivision,  or  (ii)  income,  gains or losses from subsidiary capital
  that  are  not  excluded  from  entire  net  income  pursuant  to   such
  subparagraph (A);
    * NB Effective January 1, 2011
    (I)  in  the  case  of  a  life  insurance  company, the provisions of
  subparagraph (B) of this paragraph shall not apply to the policyholders'
  share of the items described in such subparagraph. For purposes of  this
  subparagraph,  the  policyholders' share means the percentage determined
  under paragraph two of subsection (a) of section eight hundred twelve of
  the internal revenue code.
    (J) in the case of a taxpayer who is separately or as a partner  of  a
  partnership  doing  an  insurance  business  as a member of the New York
  insurance exchange described in section six thousand two hundred one  of
  the insurance law, such taxpayer's distributive or pro rata share of the
  allocated  entire  net  income of such business as determined under this
  section and section fifteen  hundred  four  of  this  article,  provided
  however,  in  the event such allocated entire net income is a loss, such
  taxpayer's distributive or pro rata share of  such  loss  shall  not  be
  subtracted  from  federal  taxable income in computing entire net income
  under this section.
    (K) for taxable years beginning after December thirty-first,  nineteen
  hundred eighty-one, except with respect to property which is a qualified
  mass  commuting vehicle described in subparagraph (D) of paragraph eight
  of subsection (f) of section one hundred  sixty-eight  of  the  internal
  revenue code (relating to qualified mass commuting vehicles), any amount
  which  the  taxpayer  claimed  as  a  deduction  for  federal income tax
  purposes solely as  a  result  of  an  election  made  pursuant  to  the
  provisions  of  such  paragraph eight as it was in effect for agreements
  entered into prior to January first, nineteen hundred eighty-four;
    (L) for taxable years beginning after December thirty-first,  nineteen
  hundred eighty-one, except with respect to property which is a qualified
  mass  commuting vehicle described in subparagraph (D) of paragraph eight
  of subsection (f) of section one hundred  sixty-eight  of  the  internal
  revenue code (relating to qualified mass commuting vehicles), any amount
  which   the  taxpayer  would  have  been  required  to  include  in  the
  computation of its taxable income for federal income tax purposes had it
  not made the election permitted pursuant to such paragraph eight  as  it
  was  in  effect  for  agreements  entered  into  prior to January first,
  nineteen hundred eighty-four;
    (M) in the case  of  property  placed  in  service  in  taxable  years
  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years
  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,
  except with respect to property subject to the provisions of section two
  hundred  eighty-F  of  the internal revenue code and property subject to

  the provisions of  section  one  hundred  sixty-eight  of  the  internal
  revenue  code  which is placed in service in this state in taxable years
  beginning after December thirty-first, nineteen hundred eighty-four, the
  amount  allowable  as  a  deduction determined under section one hundred
  sixty-eight of the internal revenue code;
    (N) upon the disposition of property to which paragraph  ten  of  this
  subdivision  applies,  the amount, if any, by which the aggregate of the
  amounts described in such paragraph ten attributable  to  such  property
  exceeds  the  aggregate  of the amounts described in subparagraph (M) of
  this paragraph attributable to such property;
    (N-1)  premiums  paid  for  environmental  remediation  insurance,  as
  defined  in  section  twenty-three  of  this  chapter,  and  deducted in
  determining federal taxable income, to the extent of the amount  of  the
  environmental  remediation  insurance  credit allowed under such section
  twenty-three and subdivision (w) of section fifteen  hundred  eleven  of
  this article;
    (O) the amount of unearned premiums on outstanding business at the end
  of  the preceding taxable year excluded from premiums earned pursuant to
  the provisions of section 832(b)(4)(B) of the internal revenue code;
    (P) the amount of unearned premiums on outstanding business at the end
  of the preceding year excluded from  premiums  earned  pursuant  to  the
  provisions of section 832(b)(7)(B)(i) of the internal revenue code;
    (Q)   the  amount  excluded  from  premiums  earned  pursuant  to  the
  provisions of section 832(b)(8)(A)(i) of the internal revenue code which
  is the difference between the amount of discounted unearned premiums  on
  outstanding  business  at  the end of the preceding taxable year and the
  amount of unearned premiums on outstanding business at the  end  of  the
  preceding taxable year;
    (R)  the  amount  which  is  the  difference  between  the  amount  of
  discounted unpaid losses at the end of  the  preceding  federal  taxable
  year  used  in  the  computation of losses incurred for the taxable year
  pursuant to section 832(b)(5)(A) of the internal revenue code,  and  the
  amount of unpaid losses at the end of the preceding federal taxable year
  that  would  have  been used in such computation for the taxable year if
  such losses were not discounted pursuant to the  provisions  of  section
  846(a) of the internal revenue code; and
    (S)  the  amount  of the deduction claimed by the taxpayer pursuant to
  the provisions of section 847(1) of the internal revenue code.
    (T) for taxable  years  beginning  after  December  thirty-first,  two
  thousand  two,  in the case of qualified property described in paragraph
  two of subsection k of section 168 of the internal revenue  code,  other
  than  qualified  resurgence zone property described in paragraph sixteen
  of this subdivision, and other than  qualified  New  York  Liberty  Zone
  property  described in paragraph two of subsection b of section 1400L of
  the internal revenue code (without regard to clause (i) of  subparagraph
  (C)  of  such  paragraph),  which was placed in service on or after June
  first, two thousand three, the amount allowable  as  a  deduction  under
  section 167 of the internal revenue code.
    (U)  The  amount  of  any  deduction  allowed  pursuant to section one
  hundred ninety-nine of the internal revenue code.
    (V) The amount of  any  federal  deduction  for  taxes  imposed  under
  article twenty-three of this chapter.
    (3)  In  determining  entire net income, there shall be subtracted, to
  the extent not deductible in determining federal taxable income:
    (A) interest on indebtedness incurred  or  continued  to  purchase  or
  carry  obligations or securities the income from which is subject to tax
  under this article but exempt from federal income tax;

    (B) ordinary and  necessary  expenses  paid  or  incurred  during  the
  taxable  year  attributable to income which is subject to tax under this
  article but exempt from federal income tax; and
    (C)  the amortizable bond premium for the taxable year on any bond the
  interest on which is subject to tax under this article but  exempt  from
  federal income tax.
    (4)  Any "net operating loss deduction" or "operations loss deduction"
  allowable under sections one hundred seventy-two or eight hundred ten of
  the internal revenue code,  respectively,  which  is  allowable  to  the
  taxpayer for federal income tax purposes:
    (A)  shall  be  adjusted  to reflect the modifications required by the
  other paragraphs of this subdivision;
    (B) shall not, however, exceed any such  deduction  allowable  to  the
  taxpayer for the taxable year for federal income tax purposes; and
    (C)  shall  not  include  any  such  loss  incurred  in a taxable year
  beginning prior to  January  first,  nineteen  hundred  seventy-four  or
  during any taxable year in which the taxpayer was not subject to the tax
  imposed under section fifteen hundred one.
    (5) In case of property of a taxpayer acquired prior to January first,
  nineteen   hundred   seventy-four,   and  disposed  of  thereafter,  the
  computation of entire net income shall be modified as follows:
    (A) no gain shall be deemed to have been derived if either the cost or
  the fair market price  or  value  on  January  first,  nineteen  hundred
  seventy-four, exceeds the value realized;
    (B)  no loss shall be deemed to have been sustained if either the cost
  or the fair market price or value on  January  first,  nineteen  hundred
  seventy-four, is less than the value realized;
    (C)  where both the cost and the fair market price or value on January
  first, nineteen hundred seventy-four, are less than the value  realized,
  the  basis for computing gain shall be the cost or the fair market price
  or value on such date, whichever is higher;
    (D) where both the cost and the fair market price or value on  January
  first,  nineteen  hundred  seventy-four,  are  in  excess  of  the value
  realized, the basis for computing loss shall be the  cost  or  the  fair
  market price or value on such date, whichever is lower.
    (6)  There shall be excluded from the computation of entire net income
  any amount allowed as a deduction for federal income  tax  purposes  for
  the  taxable  year  under  section twelve hundred twelve of the internal
  revenue code as a capital loss carryforward to the  taxable  year  which
  resulted  from a capital loss occurring in any taxable year in which the
  taxpayer was not subject to tax under section fifteen hundred one.
    (7) There shall be excluded from the computation of entire net  income
  the  amount  of  any  income  or  gain from the sale of real or personal
  property which is includible in determining federal taxable  income  for
  the  taxable  year pursuant to the installment method under section four
  hundred fifty-three of the internal revenue  code  to  the  extent  such
  income  or  gain  is  from  a  sale of such property which occurred in a
  taxable year when the taxpayer was not  subject  to  tax  under  section
  fifteen hundred one.
    (8)  Entire  net income shall be computed without regard to subsection
  (b) of section eight hundred thirty-one of the internal revenue code.
    (9) In computing the entire net income of a taxpayer
    (A) which is a fire or life insurance company organized and  operated,
  without profit to any private shareholder or individual, exclusively for
  the   purpose   of   aiding  and  strengthening  charitable,  religious,
  missionary,  educational  or  philanthropic  institutions,  by   issuing
  insurance  and  annuity  contracts  only  to  or for the benefit of such
  institutions,  to  individuals  engaged  in   the   services   of   such

  institutions   and   to  members  of  the  immediate  families  of  such
  individuals, or
    (B) which is a life insurance company which has been organized for the
  purpose  of  establishing  a  non-profit voluntary employees beneficiary
  association to  provide  life,  sick,  accident  or  other  benefits  to
  eligible  employees  or their beneficiaries, and is operated exclusively
  for said purposes and without profit, direct or indirect, to any private
  shareholder or individual, and  is  duly  exempt  from  income  taxation
  pursuant  to the United States internal revenue code, the life insurance
  company taxable income (which shall include, in the case of a stock life
  insurance company which has an existing policyholders  surplus  account,
  the  amount of direct and indirect distributions during the taxable year
  to shareholders from such account) or taxable income, as  the  case  may
  be,  of  such  taxpayer  for  the taxable year shall be computed without
  regard to any income, gains, losses, deductions,  reserves,  surplus  or
  any other item, derived from, or attributable or allocable to, contracts
  described  in  subsection  (a)  of section eight hundred eighteen of the
  internal revenue code.
    (10) In the case of  property  placed  in  service  in  taxable  years
  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years
  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,
  except with respect to property subject to the provisions of section two
  hundred  eighty-F  of  the internal revenue code and property subject to
  the provisions of  section  one  hundred  sixty-eight  of  the  internal
  revenue  code  which is placed in service in this state in taxable years
  beginning after December thirty-first, nineteen hundred eighty-four, and
  provided a deduction has not been excluded  from  the  determination  of
  entire  net income pursuant to subparagraph (K) of paragraph two of this
  subdivision, a taxpayer shall be allowed with respect to property  which
  is  subject  to the provisions of section one hundred sixty-eight of the
  internal revenue code the depreciation deduction allowable under section
  one hundred sixty-seven of the internal revenue  code  as  such  section
  would   have   applied   to  property  placed  in  service  on  December
  thirty-first, nineteen hundred eighty.
    (11)(A)  Notwithstanding  the  provisions  of  subparagraph   (P)   of
  paragraph  one  of  this  subdivision, for taxable years beginning after
  December thirty-first, nineteen hundred  ninety-two  and  ending  before
  December  thirty-first,  nineteen  hundred ninety-six, entire net income
  shall include the amount  determined  under  subparagraph  (B)  of  this
  paragraph.    This amount shall be included in entire net income only if
  the taxpayer claimed the deduction allowed by subdivision one of section
  eight hundred forty-seven of the internal revenue code  in  any  taxable
  year   beginning   after   December   thirty-first,   nineteen   hundred
  eighty-seven  and  ending  before  January   first,   nineteen   hundred
  ninety-three.
    (B)  The  amount  to  be  included  in  entire  net  income under this
  paragraph shall be determined as follows. The taxpayer  shall  calculate
  the  total  amount that will be required to be included in federal gross
  income pursuant to the  provisions  of  subdivisions  five  and  six  of
  section  eight  hundred  forty-seven  of  the  internal revenue code for
  federal taxable years beginning after  December  thirty-first,  nineteen
  hundred  ninety-two as a result of the deduction claimed by the taxpayer
  in federal taxable years beginning after December thirty-first, nineteen
  hundred  eighty-seven  and  before  January  first,   nineteen   hundred
  ninety-three  pursuant  to  the provisions of subdivision one of section
  eight hundred forty-seven of the internal  revenue  code.  The  taxpayer
  shall  divide  such  total  amount  by  three.  An  amount  equal to the
  resulting quotient shall be included in entire net income in each of the

  taxpayer's first three taxable years beginning on or after January  one,
  nineteen hundred ninety-three.
    12.  Emerging  technology investment deferral. In the case of any sale
  of a qualified emerging  technologies  investment  held  for  more  than
  thirty-six  months  and  with  respect  to which the taxpayer elects the
  application of this subsection, gain from such sale shall be  recognized
  only  to  the  extent  that the amount realized on such sale exceeds the
  cost of any qualified emerging technologies investment purchased by  the
  taxpayer during the three hundred sixty-five-day period beginning on the
  date  of such sale, reduced by any portion of such cost previously taken
  into account under this paragraph. For purposes of  this  paragraph  the
  following shall apply:
    (1)  A  qualified investment is stock of a corporation or an interest,
  other than as a creditor, in a partnership or limited liability  company
  that was acquired by the taxpayer as provided in Internal Revenue Code §
  1202(c)(1)(B),  except  that  the  reference to the term "stock" in such
  section shall be read as "investment," or by the taxpayer from a  person
  who had acquired such stock or interest in such a manner.
    (2)   A  qualified  emerging  technology  investment  is  a  qualified
  investment, that was held  by  the  taxpayer  for  at  least  thirty-six
  months,  in  a  company  defined  in paragraph (c) of subdivision one of
  section thirty-one hundred two-e of the public  authorities  law  or  an
  investment  in  a partnership or limited liability company that is taxed
  as a  partnership  to  the  extent  that  such  partnership  or  limited
  liability company invests in qualified emerging technology companies.
    (3)  For  purposes  of  determining whether the nonrecognition of gain
  under this subsection  applies  to  a  qualified  emerging  technologies
  investment  that  is  sold,  the  taxpayer's  holding  period  for  such
  investment and the qualified emerging technologies  investment  that  is
  purchased  shall be determined without regard to Internal Revenue Code §
  1223.
    13. Amounts deferred. The amount deferred under  paragraph  twelve  of
  this   subdivision  shall  be  added  to  entire  net  income  when  the
  reinvestment in the New York qualified emerging technology company which
  qualified a taxpayer for such deferral is sold.
    * (14) For taxable years beginning after  December  thirty-first,  two
  thousand  two,  in the case of qualified property described in paragraph
  two of subsection k of section 168 of the internal revenue  code,  other
  than  qualified  resurgence zone property described in paragraph sixteen
  of this subdivision, and other than  qualified  New  York  Liberty  Zone
  property  described in paragraph two of subsection b of section 1400L of
  the internal revenue code (without regard to clause (i) of  subparagraph
  (C)  of  such  paragraph),  which was placed in service on or after June
  first, two thousand three, a taxpayer shall be allowed with  respect  to
  such  property the depreciation deduction allowable under section 167 of
  the internal revenue code as such section would  have  applied  to  such
  property  had  it  been acquired by the taxpayer on September tenth, two
  thousand one.
    * NB There are 2 par (14)'s
    * (14) Related members expense add back and income exclusion.
    (A) Definitions. (i) Related member or members. For purposes  of  this
  paragraph,   the   term  related  member  or  members  means  a  person,
  corporation, or other entity, including an entity that is treated  as  a
  partnership  or  other  pass-through  vehicle  for  purposes  of federal
  taxation, whether such person, corporation or entity is  a  taxpayer  or
  not,  where  one  such person, corporation, or entity, or set of related
  persons, corporations  or  entities,  directly  or  indirectly  owns  or
  controls  a  controlling  interest  in  another  entity.  Such entity or

  entities may include all taxpayers under article nine, nine-A, thirteen,
  twenty-two, thirty-two, thirty-three or thirty-three-A of this chapter.
    (ii)  Controlling  interest.  A controlling interest shall mean (I) in
  the case of a corporation, either thirty percent or more  of  the  total
  combined  voting  power  of all classes of stock of such corporation, or
  thirty percent or more of the capital, profits or beneficial interest in
  such voting stock of such  corporation,  and  (II)  in  the  case  of  a
  partnership,  association, trust or other entity, thirty percent or more
  of the capital, profits or  beneficial  interest  in  such  partnership,
  association, trust or other entity.
    (iii)   Royalty  payments.  Royalty  payments  are  payments  directly
  connected to the acquisition, use, maintenance or management, ownership,
  sale, exchange,  or  any  other  disposition  of  licenses,  trademarks,
  copyrights,  trade  names, trade dress, service marks, mask works, trade
  secrets, patents and any other similar types  of  intangible  assets  as
  determined  by  the  commissioner,  and  includes  amounts  allowable as
  interest  deductions  under  section  one  hundred  sixty-three  of  the
  internal  revenue  code  to  the  extent  such  amounts  are directly or
  indirectly for, related to or in connection with the  acquisition,  use,
  maintenance  or  management, ownership, sale, exchange or disposition of
  such intangible assets.
    (iv) Valid business purpose. A valid business purpose is one  or  more
  business  purposes,  other  than the avoidance or reduction of taxation,
  which alone or in combination constitute the primary motivation for some
  business activity or transaction, which activity or transaction  changes
  in  a  meaningful  way, apart from tax effects, the economic position of
  the taxpayer. The economic position of the taxpayer includes an increase
  in the market share of the taxpayer, or the entry by the  taxpayer  into
  new business markets.
    (B) Royalty expense add backs. (i) Except where a taxpayer is included
  in  a  combined return with a related member pursuant to subdivision (f)
  of section fifteen hundred fifteen of this article, for the  purpose  of
  computing  entire  net income, a taxpayer must add back royalty payments
  to a related member during the taxable year to the extent deductible  in
  calculating federal taxable income.
    (ii)  The add back of royalty payments shall not be required if and to
  the extent that such payments meet either of the following conditions:
    (I) the related member  during  the  same  taxable  year  directly  or
  indirectly paid or incurred the amount to a person or entity that is not
  a related member, and such transaction was done for a valid business and
  the payments are made at arm's length;
    (II)  the  royalty  payments  are paid or incurred to a related member
  organized under the laws of a country other than the United States,  are
  subject  to  a  comprehensive income tax treaty between such country and
  the United States, and are taxed in such country at a tax rate at  least
  equal to that imposed by this state.
    (C) Royalty income exclusions. For the purpose of computing entire net
  income,  a taxpayer shall be allowed to deduct royalty payments directly
  or indirectly received from a related member during the taxable year  to
  the extent included in the taxpayer's federal taxable income unless such
  royalty   payments  would  not  be  required  to  be  added  back  under
  subparagraph (B) of this paragraph or other similar  provision  in  this
  chapter.
    * NB There are 2 par (14)'s
    (15)  For  taxable  years  beginning  after December thirty-first, two
  thousand two, upon  the  disposition  of  property  to  which  paragraph
  fourteen  of  this  subdivision  applies, the amount of any gain or loss
  includible in entire  net  income  shall  be  adjusted  to  reflect  the

  inclusions   and   exclusions   from   entire  net  income  pursuant  to
  subparagraph (R) of paragraph one and subparagraph (T) of paragraph  two
  of this subdivision attributable to such property.
    (16)   For  purposes  of  paragraphs  fourteen  and  fifteen  of  this
  subdivision, qualified resurgence zone  property  shall  mean  qualified
  property  described  in  paragraph two of subsection k of section 168 of
  the internal revenue code substantially all of the use of  which  is  in
  the resurgence zone, as defined below, and is in the active conduct of a
  trade  or business by the taxpayer in such zone, and the original use of
  which in the resurgence zone commences with the taxpayer after  December
  thirty-first,  two thousand two. The resurgence zone shall mean the area
  of New York county bounded on the south  by  a  line  running  from  the
  intersection  of  the  Hudson River with the Holland Tunnel, and running
  thence east to Canal Street, then running along the centerline of  Canal
  Street  to  the  intersection  of  the  Bowery and Canal Street, running
  thence in a southeasterly direction diagonally across  Manhattan  Bridge
  Plaza,  to  the  Manhattan Bridge and thence along the centerline of the
  Manhattan Bridge to the point where  the  centerline  of  the  Manhattan
  Bridge  would  intersect  with  the easterly bank of the East River, and
  bounded on the north by a line running  from  the  intersection  of  the
  Hudson River with the Holland Tunnel and running thence north along West
  Avenue  to  the  intersection of Clarkson Street then running east along
  the centerline of Clarkson Street  to  the  intersection  of  Washington
  Avenue,  then running south along the centerline of Washington Avenue to
  the intersection of West Houston Street, then east along the  centerline
  of  West  Houston  Street, then at the intersection of the Avenue of the
  Americas continuing east along the centerline of East Houston Street  to
  the easterly bank of the East River.
    (c)  Attribution  of  income  to  different  taxable  years.  The  tax
  commission may, whenever necessary in  order  to  properly  reflect  the
  entire net income of any taxpayer, determine the year or period in which
  any item of income or deduction shall be included, without regard to the
  method of accounting employed by the taxpayer.