club_cafe: Re: Re: NY Tax Issue

iras1 on

In a message dated 02/29/2008 5:50:51 P.M. Eastern Standard Time, loutaormina@bivio.com writes:

Ira,

Just noticed that the NY tax forms are available on the site. I am reviewing (recall from our prior correspondence that I said I never filed one of these before) and I have some follow up questions.

I reviewed the 204 instructions and do not believe our club has new york source income. However the automated forms seem to contradict itself.

On IT-204 section 1 part B 1) the box is checked "no". Then nothing was filled in for b2 even though we have a number of resident partners. Do I have to fill this in by hand?

There should be a number there. Perhaps there is a bug in the program.

Then the part that seems to contradict itself. In Section 10 line 118 the box is checked yes. (for income earned in NY). Also nothing is listed for place of business in part 1 of section 10. We don't have an office so I assume we leave this blank?

Section 10 should be completely blank. Perhaps there is a bug in the program.

Aren't section 1 and section 10 saying two different things?

As completed on your return, yes.

I read the instructions to IT 204 and am confused. I do not think our club has income from NY sources. We do not have "income attributable to a "business, trade, profession or occupation in NY state". That definition per 204 requires that the club maintain or operate a office, shop, warehouse or other place in NY where its affairs are systematically and regularly carried out. We are not a hedge fund with a management team that is taking a portion of the profits to run the business. We have no office.

Maybe I am reading the 204 to liberally but I don't see how an investment club would be subject to NY tax. Our ny members will declare gains/losses under schedule b and d of federal form and this flows through to NY state form. How do out of state club members have to file in ny?

Your club is not subject to NY tax. It's NY-resident members need to report their share of club income on their IT-201 (or equivalent). Your out-of-state members have no filing requirement with NY based on participation in the club.

Also, does it automatically calculate a 204.1 form? Our club does not have a corporate partner so we don't need to file this form, right?

I don't know what bivio's tax program is doing for NY, but you should not be generating an IT-204.1 unless one of the members of your club is a corporation. I doubt this is the case.

Thanks for your patience and any advice you can give on this. I really appreciate it.

Hope this helps.

Ira Smilovitz

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Paul Moeller on

IraS1@aol.com wrote:
>> Then nothing was filled in for b2 even though we have a number of resident partners. Do I have to fill this in by hand?
> There should be a number there. Perhaps there is a bug in the
> program.

> Section 10 should be completely blank. Perhaps there is a bug in the
> program.

> I don't know what bivio's tax program is doing for NY, but you should not
> be generating an IT-204.1 unless one of the members of your club is a
> corporation. I doubt this is the case.

These problems have been corrected, and you can re-download the document for your club.

Paul Moeller
bivio, Inc.

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