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CGCPA
CGCPA, CPA
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NY Corporation with residential property in California, (corp

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NY Corporation with residential property in California, (corp had property at one time in NY) but sold it, just sold two residential properties in California at a large gain. Net gain is several million. I understand Federal tax @ 35 percent and California corporation tax is due, what about NY? Corporation is a C corp, unfortunately set up that way several years ago.
Submitted: 4 years ago.
Category: Tax
Expert:  CGCPA replied 4 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

The corporation, a NY entity, will need to file a return and pay any tax due on this transaction if there is a gain. However, the state will allow a credit for the taxes paid to California on this. The credit will be the lower of the tax actually paid to California or the NY tax computed before the credit. NY corporate tax rates are presently 7.1% of taxable income and there are minimum taxes imposed. Here is the tax rate schedule reflecting the minimum taxes as well as the rates:

 

Tax rates schedule

Tax base Tax rates

Table 1 - ENI base for general business taxpayers .071

Table 2 - ENI base for qualified small business taxpayers

ENI base of $290,000 or less: .065

ENI base of more than $290,000 but not more than $390,000: • $18,850

  • plus 7.1% of the amount over $290,000
  • plus 4.35% of the amount over $350,000

Table 3 - For tax years beginning on or after January 31, 2007

ENI base for qualified New York manufacturers .065

Table 4 - Capital base .0015

Table 5 - Qualified cooperative housing corporation capital base* .0004

Table 6 - MTI base .015

Table 7 - Fixed dollar minimum tax

For a corporation with New York receipts of:

Not more than $100,000 $ 25**

More than $100,000 but not over $250,000: $ 75**

More than $250,000 but not over $500,000: $ 175**

More than $500,000 but not over $1,000,000: $ 500

More than $1,000,000 but not over $5,000,000: $1,500

More than $5,000,000 but not over $25,000,000: $3,500

Over $25,000,000 $5,000

Table 8 - Subsidiary capital base .0009

 

Customer: replied 4 years ago.

Charles,

 

Thank you for your timely answer, however I researched the NY corporation credit form which is CT-600 and I can not ascertain where the credit is taken. Can you assist here?

Specifically what section and line number would be appropriate on that form.

 

Thanks in advance for your help.

 

Expert:  CGCPA replied 4 years ago.
They are to be included on line 4 of the CT-600. You will need to attach a sheet detailing the credit. It will show the tax paid to California and the NYS tax on that same income. Then claim the lower of the two. You will also need to attach a copy of the California return. This will be a mail in return.
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