CCH Axcess Tax

Introduction to the New York City Partnership Return

The New York City partnership return is prepared for calendar, fiscal and short year partnerships. Using entries from the federal return and on federal and New York City worksheets, the following forms and schedules are produced for the New York City return:

Form NYC-5UB, Partnership Declaration of Estimated Unincorporated Business Tax
Form NYC-EXT, New York City Automatic Extension
Form NYC-204, Unincorporated Business Tax Return
Form NYC-204-EZ, Unincorporated Business Tax Return, if applicable
Form NYC-221, Underpayment of Estimated Tax
Form NYC-114.7, UBT Paid Credit
Form NYC-399, Schedule of New York City Depreciation Adjustments
Form NYC-399Z, Depreciation Adjustments for Certain Post 9/10/01 Property
Schedule K-1 Equivalent for each partner
Form POA-1, Power of Attorney

A copy of the federal return (including all statements) is attached to the New York City return.

Federal Worksheet Notes and Features

Extensions

New York City Form NYC-EXT, Application for Automatic Extension is required when the partnership return will be filed after its original due date. The form can be requested in the following ways:

Check the "Produce all state first extensions" field on the State Extension Information section of the federal Extensions worksheet. New York City must be the city indicated in "City Code" on the Federal Basic Data worksheet, or there must be some input on the New York City worksheet.
Enter "NYC" in the "City Code" the State Extension Information section of the federal Extensions worksheet. Again, New York City must be the city indicated in the "City Code" field on the Federal Basic Data worksheet or there must be some input on the New York City worksheet.
The preceding year's tax on the New York City Extension section of the federal Extensions worksheet is proformaed from the prior year's tax return. The current year's estimated tax carries from the "Net tax" line of NYC-204, Schedule A - Computation of Tax. To override for extension purposes, use Estimated tax - override.
4. Use government view to key data directly on New York City Form NYC-EXT.

Generic State Schedule K-1 Information Worksheet

The Generic State Schedule K-1 Information worksheet can be used to enter the percentage of time that partners devoted to business for the New York City return. Be sure to enter the partner number. Your entries from the "Time devoted to Business" and "Percentage of Time Devoted to Business" fields are carried to the partnership information section on Form NYC-204, Schedule C.

Penalties Worksheet

The State Interest Rate Overrides section of the Penalties worksheet is available to override the late payment interest rate for Form NYC-204. Be sure to enter the city code of "NYC" in the State Interest Rate Overrides section. Enter the rate change only for the quarters needed starting in the Late Payment Interest Override by Quarters . Also, check the applicable late payment interest/penalty fields on the Penalties worksheet, as well as the date the return will be filed if after due date on the "Date return to be filed if after due date" field on the worksheet.

Depreciation

New York City has not conformed to federal Job Creation and Worker Assistance (JCWA) for assets placed in service outside of the New York Liberty Zone. A depreciation adjustment is computed from entries on the Depreciation and Amortization worksheet. The computed adjustment prints on form NYC-399Z.

New York City does not allow federal ACRS depreciation for assets acquired between January 1, 1981 and December 31, 1984 with the exception of property subject to IRC Section 280F (i.e. luxury automobiles).

If New York is the state entered on the Federal Basic Data worksheet for the automatic state return, New York City depreciation is calculated using your entries on the Depreciation and Amortization worksheet. For assets purchased between January 1, 1981 and December 31, 1984 and out-of-state assets purchased after 1984, use the Depreciation and Amortization worksheet to enter the pre-1981 method, useful life and accumulated depreciation for these assets. Depreciation is calculated from this form. If you entered this information on the Depreciation and Amortization worksheet for the New York State return, the information is also used for the New York City return.

State if different depreciation can be entered on the Depreciation and Amortization worksheet for more than the home state. A State/Book Code is available to identify any Depreciation and Amortization worksheet asset that is for a state or book entry other than the home state. If the State/Book Code is left blank, the following order will be used to determine where depreciation is to flow:

Code "BK" is assumed if the "Treat State-if-different Assets as Book Assets" field on the Depreciation Options and Overrides worksheetis checked.
The State/Book Code is assumed to be the same state code entered on the Rent and Royalty or Farm/4835 worksheets for which depreciation data is attached.
Code "BK is assumed when "F" is entered for FS Code and a state code is not present on the Rent and Royalty or Farm/4835 worksheets for which the depreciation is attached.
The State/Book Code is assumed to be the Federal Basic Data worksheet "Home State Code".
A code of "XX" is assumed if the Federal Basic Data worksheet "Home State Code" is blank.

Code "XX" indicates "various" which allows the state if different asset to apply to all states in the return for which the Depreciation and Amortization worksheet is used. There can be more than one worksheet entry for each asset. This will allow an asset to use different depreciation methods in different states. A unique State/Book Code is required for multiple worksheet entries for the same asset number.

FS Codes

The New York City return reports adjustments to federal income. Except as noted below you are not required to use FS codes to prepare the New York City partnership return. All income and expenses included on the federal worksheets carry to the New York City return. Generally, additions and subtractions to federal income are handled through entries on the New York City worksheet.

The following items are carried from the federal return and do not require additional entries on the New York City worksheet:

Interest on U.S. obligations
Municipal bond interest from states other than New York
Jobs credit wage reduction
Income and unincorporated business taxes
New York City depreciation (if the "State code" field on the Federal Basic Data worksheet = "NY")
Federal ACRS depreciation (if the "State code" field on the Federal Basic Data worksheet = "NY")
Year of disposition adjustment (if the "State code" field on the Federal Basic Data worksheet = "NY")
Section 179 expense
Other portfolio deductions
Investment interest expense

U.S. Obligations

Interest on obligations of the United States (entered on the Interest/Dividends worksheet) are carried to the New York City return as a subtraction from federal income.

Municipal Bond Interest

New York City includes municipal bond interest from sources outside the state in New York City income. This interest is carried from the Interest/Dividends worksheet to the New York City return as an addition to federal income.

Be sure to indicate the source of municipal bond interest by using the "State" field on the Interest/Dividends worksheet.

Interest is assumed to originate in the state entered in the State code on Federal Basic Data worksheet if "State" on Federal Interest Income worksheet is blank.

Jobs Credit Wage Deduction

Wages or salaries eligible for the federal jobs credit that are not deducted on the federal return carry to the New York City return as a subtraction from federal income.

Income and Unincorporated Business Taxes

All state, city and local income taxes entered on the federal worksheets carry to the New York City return as an addition to federal income. Taxes entered in the "State income taxes" and "City/local income taxes" fields on the Income and Deductions and Rent/Royalty worksheets carry to the New York City return.

Accrued taxes from other states and cities in the return are also carried to the New York City return if these taxes were deducted on the federal return.

To override the adjustment for income and unincorporated business taxes, use the Income/Deduction section of the New York City worksheet.

Sec 179 Expense/Portfolio Ded/Invest Interest/Sec 754 Ded

The amounts reported on the federal Schedule K for Section 179 expense, portfolio deductions, investment interest expense and Section 754 deductions are carried to the New York City Schedule B, Part 2, and subtracted from federal income on the "Other Subtractions" line.

Footnotes

Federal, state and city footnotes entered on the Federal and State Footnotes section of the Notes worksheet print on the New York City return. Also, federal, state and city footnotes entered on the Schedule K-1 Footnotes worksheet print on the New York City Schedule K-1 Equivalent. Use the entries for "FS", "State", "City" and "State Use" on the Notes and Schedule K-1 Footnotes worksheets to control the printing of these footnotes on the New York City return.

If the state code is left blank, the assumption is made that these footnotes should also flow to the home state return indicated on the General section of federal Basic Data worksheet. To cause a footnote to flow only to the New York City return, enter 'S' in the FS code field, 'FC' in the state code field and 'NYC' in the city code field.

When the short form NYC-204-EZ is produced, enter a '1' in the "State Use" field to have footnotes print behind Form NYC-204-EZ. If the "State Use" field is left blank, footnotes will print behind Form NYC-204.

Refer to the instructions for the Notes and Schedule K-1 Footnotes worksheets for additional details.

K-1 Suppression

Use the Schedule K-1 Print Options section of the General Options worksheet to suppress all state and city Schedules K-1 (or equivalents). See the instructions on the General Options worksheet under "Suppress Schedules K-1 Print Code".

K-1 Statement Suppression

Use the Schedule K-1 Print Options section of the General Options worksheet to suppress supporting statements for the New York City Schedules K-1 (equivalents). See the instructions on the General Options worksheet under "Suppress Schedule K-1 Statements Code".

Type of Partnership

The return type indicated on the New York City return is determined by federal Form 1065, Schedule B, question 1. If the federal return is a general partnership, then the New York City return is designated as a general partnership. If the federal return is a Limited Liability Company, or Limited Liability Investment Company, then the New York City return is designated as a Limited Liability Company return. If the federal return is designated as a Limited Liability Partnership, the New York City return is also designated as a Limited Liability Partnership. If the federal return is any other type of entity, then the New York City return is designated as a Limited Partnership.

An entry on the "Type of entity" field on the State/City Information section of the Generic State Schedule K-1 Information worksheet overrides the default to the federal return type when "State code" on the State/City Information section of the Generic State Schedule K-1 Information worksheet is "NY" or blank or New York City has been identified as the applicable city in the "City code" field. The New York City return is designated as a general partnership when code 1 is entered in the "Type of entity" field. The New York City return is designated as a Limited Liability Company when codes 3 or 5 are entered in this field (for Limited Liability and Limited Liability Investment Company). The New York City return is designated as a Limited Partnership if code 2 is entered and a Limited Liability Partnership if code 4 is entered.

Final and Amended K-1s

The Schedules K-1 equivalent are designated as final or amended if the same federal partner's Schedule K-1 is final or amended. In addition, if the New York City return is final or amended, all Schedules K-1 are designated as final or amended. Use the Generic State Schedule K-1 Information worksheet to override these defaults, or to designate a Schedule K-1 separately.

Multi-State Apportionment

Method: There are two input methods available to enter the apportionment detail information to compute the sales, payroll and property factors. Detail entries on the Federal Allocation and Apportionment worksheets are used when detailed computations are needed. Use the Allocation and Apportionment section of the New York City worksheet to override entries on the Federal Allocation and Apportionment worksheets. The Allocation and Apportionment section on the New York City worksheet can be used as original input (entries on the Federal worksheets are not required).

Using Federal Allocation and Apportionment Worksheets: On the Federal Allocation and Apportionment worksheets, a detail code is entered at the head of each column, and the amount for each state is entered on the line for that state. The total everywhere amount is computed as the sum of the entries for each state, plus entries on the lines for foreign and other. Detail codes are provided for each category of property, sales and payroll. The Federal Allocation and Apportionment worksheets are available to override the total everywhere amounts for each factor.

Refer to the federal instruction guide section for Multi-State Processing for additional information.

Note: If entries are present on the Federal Allocation and Apportionment worksheets and on the Allocation and Apportionment section of the New York City worksheet, entries on the New York City worksheet override the corresponding entries on the Federal worksheets. If an item is not present on the New York City worksheet, the corresponding entry on the Federal worksheet is used. If only totals are entered on the New York City worksheet, detail entries from the Federal worksheets print on the New York apportionment schedule. The calculated apportionment factors can be overridden on the New York City worksheet in the apportionment factors overrides section.

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