1453 - Computations of entire net income.

§ 1453. Computations of entire net income. (a) Entire net income means  total  net income from all sources which shall be the same as the entire  taxable income (but not alternative minimum taxable income)    (1) which the taxpayer is required to  report  to  the  United  States  treasury department, or    (2)  which  the taxpayer, in the case of a corporation which is exempt  from federal income tax  (other  than  the  tax  on  unrelated  business  taxable  income  imposed under section 511 of the internal revenue code)  but is subject to tax under this article, would have  been  required  to  report  to the United States treasury department but for such exemption,  or    (3) which, in the case of a corporation organized under the laws of  a  country  other than the United States, is effectively connected with the  conduct of a trade or business within the United  States  as  determined  under   section  882  of  the  internal  revenue  code  subject  to  the  modifications and adjustments hereinafter provided, or    (4) which the taxpayer would have  been  required  to  report  to  the  United  States treasury department if it had not made the election under  subchapter s of chapter one of the internal revenue code.    (b) Entire net income shall  be  computed  without  the  deduction  or  exclusion of:    (1)  (A)  in  the  case of a corporation organized under the laws of a  country other than the United States, (i) any part of  any  income  from  dividends  or interest on any kind of stock, securities or indebtedness,  but only if such income is treated as  effectively  connected  with  the  conduct  of a trade or business in the United States pursuant to section  eight hundred sixty-four of the internal revenue code, (ii)  any  income  exempt  from  federal  taxable income under any treaty obligation of the  United States, but only if such income would be treated  as  effectively  connected  in  absence  of  such  exemption,  provided  that such treaty  obligation does not preclude the taxation of such income by a state,  or  (iii) any income which would be treated as effectively connected if such  income were not excluded from gross income pursuant to subsection (a) of  section  one hundred three of the internal revenue code; (B) in the case  of any other corporation, any part  of  any  income  from  dividends  or  interest  on  any  kind of stock, securities or indebtedness; (C) except  that for purposes of subparagraphs (A) and  (B)  above  there  shall  be  excluded   any   amounts   treated  as  dividends  pursuant  to  section  seventy-eight of the internal revenue code and any amounts described  in  paragraphs eleven and twelve of subsection (e) of this section;    (2)  taxes  on or measured by income or profits paid or accrued within  the taxable year to the United States, or any of its possessions  or  to  any foreign country;    (3)  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  subsection (s) of section fourteen hundred fifty-six of this article;    (4)   taxes   imposed   under   this  article,  sections  one  hundred  eighty-three, one hundred eighty-four, and  one  hundred  eighty-six  of  article nine and article nine-A of this chapter;    (5)  in  those  instances  where  a  credit for the special additional  mortgage recording tax is allowed under paragraph one of subsection  (c)  of  section  fourteen  hundred  fifty-six  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 taxable incomewhich the taxpayer is required to report to the United  States  treasury  department for such taxable year; and    (6)  Unless  the  credit allowed pursuant to subsection (c) of section  fourteen  hundred  fifty-six  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 of 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.    (7) 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 in computing its federal  taxable income 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;    (8) 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 federal taxable income 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;    (9)  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;    (10) upon the disposition of property  to  which  paragraph  seven  of  subsection (e) of this section applies, the amount, if any, by which the  aggregate  of the amounts described in such paragraph seven attributable  to such property exceeds the  aggregate  of  the  amounts  described  in  paragraph nine of this subsection attributable to such property,    (11)  for  taxable  years beginning before January first, two thousand  ten, in the case of a taxpayer subject  to  the  provisions  of  section  585(c)  of  the internal revenue code, the amount allowed as a deduction  pursuant to section 166 of such code, and    (12) for taxable years beginning before January  first,  two  thousand  ten,  for  taxpayers subject to the provisions of subsection (i) of this  section, twenty percent of the  excess  of  (A)  the  amount  determined  pursuant  to  such  subsection  (i) over (B) the amount which would havebeen allowable had such institution maintained its bad debt reserve  for  all taxable years on the basis of actual experience.    (13)  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 subsection  (t)  of  this  section,  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.    (14) The amount of any  deduction  allowed  pursuant  to  section  one  hundred ninety-nine of the internal revenue code.    (15)  The  amount  of  any  federal  deduction for taxes imposed under  article twenty-three of this chapter.    (c) (1) Except as otherwise provided in paragraphs two, three and four  hereof, in the case of the sale or exchange of property  by  a  taxpayer  which  has  been subject to article nine-B or nine-C of this chapter (as  such articles  were  in  effect  on  or  before  December  thirty-first,  nineteen  hundred  seventy-two) where the property has a higher adjusted  basis for New York tax purposes than for  federal  tax  purposes,  there  shall  be  allowed as a deduction from entire net income, the portion of  any gain or loss on such sale which equals the difference in such basis.    (2) In case of property of a taxpayer, other than a savings bank or  a  savings  and loan association, acquired prior to January first, nineteen  hundred twenty-six, and  disposed  of  thereafter,  the  computation  of  entire net income shall be modified as follows:    (i) 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  twenty-six, exceeds the value realized;    (ii) 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  twenty-six, is less than the value realized;    (iii)  where  both  the  cost  and  the  fair market price or value on  January first, nineteen hundred twenty-six,  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;    (iv) where both the cost and the fair market price or value on January  first, nineteen hundred twenty-six, 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.    (3)  In  case  of property of a savings bank acquired prior to January  first, nineteen hundred  forty-four,  and  disposed  of  thereafter,  in  computing  entire  net  income  the  basis of such property shall be the  value as of December thirty-first, nineteen hundred forty-three, as  set  forth in such bank's report of surplus and undivided earnings filed with  the tax commission as of that date.    (4)  In  case  of property of a savings and loan association, acquired  prior to January first, nineteen hundred fifty-three,  and  disposed  of  thereafter,  the  computation  of entire net income shall be modified as  follows:    (i) 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  fifty-three, exceeds the value realized;    (ii) 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  fifty-three, is less than the value realized;(iii) where both the cost and  the  fair  market  price  or  value  on  January  first,  nineteen  hundred  fifty-three, 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;    (iv) where both the cost and the fair market price or value on January  first,  nineteen  hundred  fifty-three,  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.    (d)  Entire net income shall not include any refund or credit of a tax  for which no exclusion or  deduction  was  allowed  in  determining  the  taxpayer's  entire  net  income under this article or articles nine-A or  twenty-three of this chapter for any prior year.    (e) There shall be allowed as a deduction in  determining  entire  net  income,  to  the  extent  not  deductible in determining federal taxable  income:    (1) 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,    (2) 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,    (3) 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) 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,    (5)  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 federal taxable income 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,    (6)  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 federal taxable  income  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,    (7)  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 entire net income  pursuant to paragraph seven of subsection (b) of this section, an amount  with respect to property which is subject to the provisions  of  section  one hundred sixty-eight of the internal revenue code equal to the amount  allowable  as  the  depreciation  deduction  under  section  one hundredsixty-seven of the internal revenue code  as  such  section  would  have  applied to property placed in service on December thirty-first, nineteen  hundred eighty,    (8)  upon the disposition of property to which paragraph seven of this  subsection applies, the amount, if any, by which the  aggregate  of  the  amounts  described  in  paragraph nine of subsection (b) of this section  attributable to such property  exceeds  the  aggregate  of  the  amounts  described  in  paragraph  seven  of this subsection attributable to such  property,    (9) any amount of money or other property received  from  the  federal  deposit  insurance  corporation  pursuant  to  subsection (c) of section  thirteen of the federal deposit insurance act, as amended, regardless of  whether any note or other instrument is issued in exchange therefor,    (10) any amount of money or other property received from  the  federal  savings  and  loan insurance corporation pursuant to paragraph one, two,  three or four of subsection (f) of  section  four  hundred  six  of  the  federal national housing act, as amended, regardless of whether any note  or other instrument is issued in exchange therefor,    (11) (i) seventeen percent of interest income from subsidiary capital,  and    (ii)  sixty  percent of dividend income from subsidiary capital except  as provided in paragraph eighteen of this subsection, and    (iii) sixty percent of the  amount  by  which  gains  from  subsidiary  capital  exceed losses from subsidiary capital, to the extent such gains  and losses were taken into account in  determining  the  entire  taxable  income referred to in subsection (a) of this section,    (12) twenty-two and one-half percent of interest income on obligations  of  New  York  state, or of any political subdivision thereof, or of the  United States, other than obligations held for resale in connection with  regular trading activities,    (13) for taxable years beginning before January  first,  two  thousand  ten,  in  the  case  of  a  taxpayer which recaptures its balance of the  reserve for losses on loans for federal income tax purposes pursuant  to  section  585(c)  of  the  internal  revenue  code,  any  amount which is  included in federal taxable income pursuant to section  585(c)  of  such  code,    (14)  for  taxable  years beginning before January first, two thousand  ten, in the case of a taxpayer subject  to  the  provisions  of  section  585(c)  of  the  internal  revenue code, any amount which is included in  federal taxable income as a result of a recovery of a loan.    (15) for taxable years beginning before January  first,  two  thousand  ten, in the case of a taxpayer which is currently or has previously been  subject  to subsection (h) of this section, any amount which is included  in federal taxable income pursuant to section 593(e)(2) of the  internal  revenue code, and any other amount so included as a result of a recovery  of  or  termination  from  the  use  of a bad debt reserve as defined in  section 593 of such code  as  in  existence  on  December  thirty-first,  nineteen  hundred ninety-five as a result of federal legislation enacted  after December thirty-first, nineteen hundred ninety-five.    (16) The amount deductible pursuant to subsection (p) of this section.    (17) for taxable years  beginning  after  December  thirty-first,  two  thousand  two,  the amount deductible pursuant to subsection (r) of this  section.    (18) one hundred percent of dividend income  from  subsidiary  capital  received  during  the  taxable  year if that dividend income is directly  attributable to a dividend from a captive REIT or captive RIC for  which  the  captive  REIT  or  captive  RIC  claimed  a  federal dividends paid  deduction and that captive REIT or captive RIC is included in a combinedreport or return under article nine-A,  article  thirty-two  or  article  thirty-three of this chapter.    (f)  Provided  the  taxpayer  has  not  made  an  election pursuant to  paragraph two of subsection (b) of section fourteen  hundred  fifty-four  of  this  article,  there shall be allowed as a deduction in determining  entire net income, to the extent not deductible in  determining  federal  taxable  income,  the  adjusted  eligible net income of an international  banking facility determined as follows:    (1) The eligible net income of an international banking facility shall  be the amount remaining after subtracting from the eligible gross income  the applicable expenses.    (2) Eligible gross income shall be the  gross  income  derived  by  an  international banking facility from:    (A)  making,  arranging  for,  placing  or  servicing loans to foreign  persons, provided, however, that in the case of a foreign  person  which  is an individual, or which is a foreign branch of a domestic corporation  (other  than  a  bank),  or  which  is  a foreign corporation or foreign  partnership which is eighty per centum  or  more  owned  or  controlled,  either  directly  or  indirectly,  by  one or more domestic corporations  (other than  banks),  domestic  partnerships  or  resident  individuals,  substantially  all  the  proceeds of the loan are for use outside of the  United States;    (B) making or placing deposits with foreign persons which are banks or  foreign branches of banks (including  foreign  subsidiaries  or  foreign  branches   of   the   taxpayer)  or  with  other  international  banking  facilities; or    (C) entering into foreign exchange  trading  or  hedging  transactions  related to any of the transactions described in this paragraph.    (3)  Applicable  expenses  shall  be  any expenses or other deductions  attributable, directly or  indirectly,  to  the  eligible  gross  income  described in paragraph two of this subsection.    (4)  Adjusted  eligible  net income shall be determined by subtracting  from  eligible  net  income  the  ineligible  funding  amount,  and   by  subtracting from the amount then remaining the floor amount.    (5)  The  ineligible  funding  amount  shall  be  the  amount, if any,  determined by  multiplying  eligible  net  income  by  a  fraction,  the  numerator  of which is the average aggregate amount for the taxable year  of all liabilities, including deposits, and other sources  of  funds  of  the  international  banking  facility which were not owed to or received  from foreign persons, and  the  denominator  of  which  is  the  average  aggregate  amount  for  the  taxable  year of all liabilities, including  deposits and  other  sources  of  funds  of  the  international  banking  facility.    (6)  The  floor  amount  shall  be  the  amount, if any, determined by  multiplying  the  amount  remaining  after  subtracting  the  ineligible  funding  amount  from the eligible net income by a fraction, not greater  than one, which is determined as follows:    (A) The numerator shall be    (i)  the  percentage,  as  set  forth  in  subparagraph  (C)  of  this  paragraph,  of  the  average aggregate amount of the taxpayer's loans to  foreign persons and deposits with foreign persons  which  are  banks  or  foreign  branches  of  banks  (including foreign subsidiaries or foreign  branches of the taxpayer), which loans and deposits were recorded in the  financial accounts of  the  taxpayer  for  its  branches,  agencies  and  offices   within   the   state   for   taxable  years  nineteen  hundred  seventy-five,  nineteen  hundred  seventy-six   and   nineteen   hundred  seventy-seven, minus(ii)  the average aggregate amount of such loans and such deposits for  the taxable year of the taxpayer (other than such loans and deposits  of  an  international  banking facility), provided, however, that in no case  shall the amount determined in this clause exceed the amount  determined  in clause (i) of this subparagraph; and    (B) The denominator shall be the average aggregate amount of the loans  to  foreign persons and deposits with foreign persons which are banks or  foreign branches of banks (including  foreign  subsidiaries  or  foreign  branches of the taxpayer), which loans and deposits were recorded in the  financial  accounts of the taxpayer's international banking facility for  the taxable year.    (C) The percentage shall be one hundred percent for the first  taxable  year in which the taxpayer establishes an international banking facility  and  for the next succeeding four taxable years. The percentage shall be  eighty percent for the fifth, sixty percent for the sixth, forty percent  for the seventh, and twenty percent for the  eighth  taxable  year  next  succeeding the year such taxpayer establishes such international banking  facility, and zero in the ninth succeeding year and thereafter.    (7) In the event adjusted eligible net income is a loss, the amount of  such loss shall be added to entire net income.    (8)  For  the  purposes  of  this subsection the term "foreign person"  means    (A) an individual who is not a resident of the United States,    (B) a foreign corporation, a foreign partnership or a  foreign  trust,  as  defined in section seventy-seven hundred one of the internal revenue  code, other than a domestic branch thereof,    (C)  a  foreign  branch  of  a  domestic  corporation  (including  the  taxpayer),    (D) a foreign government or an international organization or an agency  of either, or    (E) an international banking facility.    For  purposes  of  this  paragraph, the terms "foreign" and "domestic"  shall have the same  meaning  as  set  forth  in  section  seventy-seven  hundred one of the internal revenue code.    (g)  Entire  net  income  shall  be  computed  without  regard  to the  reduction in the basis of property that is  required  by  section  three  hundred sixty-two of the internal revenue code, because of any amount of  money  or  other  property  received  from the federal deposit insurance  corporation pursuant to  subsection  (c)  of  section  thirteen  of  the  federal  deposit  insurance act, as amended, or from the federal savings  and loan insurance corporation pursuant to paragraph one, two, three  or  four  of  subsection  (f)  of  section  four  hundred six of the federal  national housing act, as amended.    (h) (1) For purposes of this subsection, a "thrift institution"  is  a  banking  corporation  which  satisfies the requirements of subparagraphs  (A) and (B) of this paragraph.    (A) Such banking corporation must be  (i)  a  banking  corporation  as  defined  in  paragraph one of subsection (a) of section fourteen hundred  fifty-two of this article created or authorized  to  do  business  under  article  six  or  ten  of the banking law, (ii) a banking corporation as  defined in paragraph two or seven of subsection (a) of section  fourteen  hundred   fifty-two   of   this   article  which  is  doing  a  business  substantially similar to the business which a corporation or association  may be created to do under article six or ten of the banking law or  any  business  which  a  corporation  or  association  is  authorized by such  article to do, or (iii) a banking corporation as  defined  in  paragraph  four  or five of subsection (a) of section fourteen hundred fifty-two of  this article.(B) At least sixty percent of the amount of the total assets  (at  the  close  of  the taxable year) of such banking corporation must consist of  (i) cash; (ii) obligations of  the  United  States  or  of  a  state  or  political subdivision thereof, and stock or obligations of a corporation  which  is  an  instrumentality  of  the  United  States or of a state or  political  subdivision  thereof,  but  not  including  obligations   the  interest  on  which is excludable from gross income under section 103 of  the internal revenue code; (iii) loans secured by a deposit or share  of  a  member;  (iv)  loans secured by an interest in real property which is  (or from the  proceeds  of  the  loan,  will  become)  residential  real  property or real property used primarily for church purposes, loans made  for  the  improvement of residential real property or real property used  primarily for church  purposes,  provided  that  for  purposes  of  this  clause,  residential  real  property shall include single or multifamily  dwellings, facilities in residential developments  dedicated  to  public  use  or  property  used  on  a nonprofit basis for residents, and mobile  homes not used on a transient basis; (v) property acquired  through  the  liquidation  of  defaulted  loans  described  in  clause  (iv)  of  this  subparagraph; (vi) any regular or residual interest in a REMIC, as  such  term  is  defined  in  section 860D of the internal revenue code and any  regular interest in a FASIT, as such term is defined in section 860L  of  the  internal  revenue code, but only in the proportion which the assets  of such REMIC or FASIT consist of  property  described  in  any  of  the  preceding  clauses  of  this  subparagraph,  except  that if ninety-five  percent or more of  the  assets  of  such  REMIC  or  FASIT  are  assets  described  in  clauses  (i) through (v) of this subparagraph, the entire  interest in the REMIC or FASIT shall qualify; (vii) any  mortgage-backed  security  which  represents ownership of a fractional undivided interest  in a trust, the assets of which consist  primarily  of  mortgage  loans,  provided  that  the real property which serves as security for the loans  is (or from the proceeds of the loan, will become) the type of  property  described  in  clause  (iv)  of this subparagraph and any collateralized  mortgage obligation,  the  security  for  which  consists  primarily  of  mortgage loans, provided that the real property which serves as security  for  the  loans  is  (or from the proceeds of the loan, will become) the  type of property described in clause (iv) of this  subparagraph;  (viii)  certificates  of  deposit in, or obligations of, a corporation organized  under a state law which  specifically  authorizes  such  corporation  to  insure the deposits or share accounts of member associations; (ix) loans  secured by an interest in real property located within any urban renewal  area  to  be  developed for predominantly residential use under an urban  renewal plan approved by the Secretary of Housing and Urban  Development  under  part  A  or  part  B  of  title  I of the Housing Act of 1949, as  amended, or located within any area covered by a  program  eligible  for  assistance   under   section   103   of  the  Demonstration  Cities  and  Metropolitan Development Act of 1966, as amended, and loans made for the  improvement of any such real property; (x) loans secured by an  interest  in educational, health, or welfare institutions or facilities, including  structures  designed  or  used  primarily  for  residential purposes for  students, residents, and persons under care, employees,  or  members  of  the  staff  of  such institutions or facilities; (xi) loans made for the  payment of expenses of college or  university  education  or  vocational  training; (xii) property used by the taxpayer in the conduct of business  which  consists  principally  of acquiring the savings of the public and  investing in loans; (xiii) loans for which the taxpayer is the  creditor  and  which  are wholly secured by loans described in clause (iv) of this  subparagraph, but excluding loans for which the taxpayer is the creditor  to any banking corporation described in paragraphs one through seven  ofsubsection  (a) of section fourteen hundred fifty-two of this article or  a real estate investment trust, as such term is defined in  section  856  of  the  internal revenue code, and excluding loans which are treated by  the  taxpayer  as  subsidiary  capital  for  purposes  of the deductions  provided by paragraph eleven of subsection (e) of  this  section;  (xiv)  small  business  loans  or  small  farm  loans  located in low-income or  moderate-income census tracts or block numbering areas delineated by the  United States bureau of the census in the most recent decennial  census;  and   (xv)   community   development   loans  or  community  development  investments. For  purposes  of  clause  (xv)  of  this  subparagraph,  a  "community  development  loan"  is  a  loan  that (I) has as its primary  purpose community development, (II) has not been reported  or  collected  by   the   taxpayer   for  consideration  in  the  taxpayer's  community  reinvestment  act  evaluation  pursuant   to   the   federal   community  reinvestment  act  of 1977, as amended, or section twenty-eight-b of the  banking law as  a  mortgage  loan  described  in  clause  (iv)  of  this  subparagraph  or  a  small  business  loan, small farm loan, or consumer  loan, (III)  benefits  the  taxpayer's  assessment  area  or  areas  for  purposes  of  the federal community reinvestment act of 1977, as amended  or section twenty-eight-b of the banking law or a broader  statewide  or  regional  area that includes the taxpayer's assessment area, and (IV) is  identified  in  the  taxpayer's  books  and  records  as   a   community  development   loan  for  purposes  of  its  community  reinvestment  act  evaluation pursuant to the federal community reinvestment act  of  1977,  as amended or section twenty-eight-b of the banking law. For purposes of  clause  (xv)  of this subparagraph, a "community development investment"  is an investment  in  a  security  which  has  as  its  primary  purpose  community  development  and  which is identified in the taxpayer's books  and records as a qualified investment  for  purposes  of  its  community  reinvestment   act   evaluation   pursuant   to  the  federal  community  reinvestment act of 1977, as amended or section  twenty-eight-b  of  the  banking  law.  For  purposes  of the two preceding sentences, "community  development" means (I) affordable housing (including multifamily  rental  housing  for  low-income or moderate-income individuals); (II) community  services targeted to low-income or  moderate-income  individuals;  (III)  activities  that promote economic development by financing businesses or  farms that meet the size eligibility standards  of  the  small  business  administration's   development  company  or  small  business  investment  company programs or have gross annual revenues of one million dollars or  less;  (IV)  activities  that  revitalize  or  stabilize  low-income  or  moderate-income census tracts or block numbering areas delineated by the  United  States bureau of the census in the most recent decennial census;  or (V) activities that seek to prevent defaults and/or  foreclosures  in  loans included in items (I) and (III) of this sentence.    (C)  At  the  election  of  the  taxpayer, the percentage specified in  subparagraph (B) of this paragraph shall be applied on the basis of  the  average assets outstanding during the taxable year, in lieu of the close  of  the taxable year. For purposes of clause (iv) of subparagraph (B) of  this paragraph, if a multifamily structure securing a loan  is  used  in  part  for  nonresidential  use  purposes,  the  entire  loan is deemed a  residential real property loan if the planned  residential  use  exceeds  eighty  percent of the property's planned use (determined as of the time  the loan is made). Also, for purposes of clause (iv) of subparagraph (B)  of this paragraph, loans made to finance the acquisition or  development  of  land  shall  be  deemed  to  be  loans  secured  by  an  interest in  residential real property if there is a reasonable  assurance  that  the  property  will become residential real property within a period of three  years from the date of acquisition of such land; but this sentence shallnot apply for any taxable year unless, within such  three  year  period,  such land becomes residential real property. For purposes of determining  whether  any  interest  in  a  REMIC  qualifies  under  clause  (vi)  of  subparagraph  (B)  of  this  paragraph,  any regular interest in another  REMIC held by such REMIC shall be treated  as  a  loan  described  in  a  preceding  clause  under  principles  similar  to  the principle of such  clause (vi); except that if such REMICS are part of a tiered  structure,  they shall be treated as one REMIC for purposes of such clause (vi).    (2)  For  taxable  years  beginning before January first, two thousand  ten, a thrift institution must  exclude  from  the  computation  of  its  entire  net  income any amount allowed as a deduction for federal income  tax purposes pursuant to sections  166,  585  or  593  of  the  internal  revenue code.    (3)  For  taxable  years  beginning before January first, two thousand  ten, a thrift institution shall be allowed as a deduction  in  computing  entire net income the amount of a reasonable addition to its reserve for  bad debts. This amount shall be equal to the sum of    (A)  the  amount determined to be a reasonable addition to the reserve  for losses on nonqualifying loans, computed in the  same  manner  as  is  provided  with  respect to additions to the reserves for losses on loans  of banks under paragraph one of subsection (i) of this section, plus    (B) the amount determined by the taxpayer to be a reasonable  addition  to  the  reserve  for losses on qualifying real property loans, but such  amount shall not exceed the amount determined under  paragraph  four  or  five  of  this  subsection,  whichever  is  the  larger,  but the amount  determined under this subparagraph shall in no case be greater than  the  larger of    (i) the amount determined under such paragraph five, or    (ii)  the  amount  which,  when  added  to the amount determined under  subparagraph (A) of this paragraph, equals the amount  by  which  twelve  percent  of the total deposits or withdrawable accounts of depositors of  the taxpayer at the close of such year exceeds the sum of  its  surplus,  undivided  profits  and  reserves  at the beginning of such year (taking  into account any portion thereof attributable to the period  before  the  first  taxable  year  beginning  after  December  thirty-first, nineteen  hundred fifty-one).    The  taxpayer  must  include  in  its  tax  return  for  each  year  a  computation  of  the  amount  of  the  addition  to the bad debt reserve  determined under this subsection. The use of a particular method in  the  return for a taxable year is not a binding election by the taxpayer.    (4)  (A)  Subject  to subparagraphs (B) and (C) of this paragraph, the  amount determined under this paragraph for the taxable year shall be  an  amount  equal  to  thirty-two  percent of the entire net income for such  year.    (B) The amount determined under subparagraph  (A)  of  this  paragraph  shall  be  reduced  (but  not  below  0)  by the amount determined under  subparagraph (A) of paragraph three of this subsection.    (C) The amount determined under this paragraph shall  not  exceed  the  amount  necessary  to  increase  the balance at the close of the taxable  year of the reserve for losses on qualifying real property loans to  six  percent of such loans outstanding at such time.    (D)  For  purposes  of  this  paragraph,  entire  net  income shall be  computed    (i) by excluding from income any amount included therein by reason  of  subparagraph (B) of paragraph eight of this subsection,    (ii) without regard to any deduction allowable for any addition to the  reserve for bad debts, and(iii) by excluding from income an amount equal to the net gain for the  taxable year arising from the sale or exchange of stock of a corporation  or  of obligations the interest on which is excludable from gross income  under section 103 of the internal revenue code.    (iv)  Whenever  a  thrift  institution  is  properly  includable  in a  combined return, entire net income,  for  purposes  of  this  paragraph,  shall  not  exceed  the  lesser  of  the thrift institution's separately  computed entire net income as adjusted pursuant to clauses  (i)  through  (iii)  of this subparagraph or the combined group's entire net income as  adjusted pursuant to clauses (i) through (iii) of this subparagraph.    (5) The amount determined under this paragraph for  the  taxable  year  shall  be computed in the same manner as is provided under paragraph one  of subsection (i) of this section with respect to additions to  reserves  for  losses  on  loans of banks. Provided, however, that for any taxable  year beginning after nineteen hundred ninety-five, for purposes of  such  computation,  the  base  year shall be the later of (A) the last taxable  year beginning in nineteen hundred ninety-five or (B) the  last  taxable  year  before  the  current year in which the amount determined under the  provisions of subparagraph (B) of paragraph  three  of  this  subsection  exceeded the amount allowable under this subparagraph.    (6)  (A)  (i)  Each  taxpayer  described  in  paragraph  one  of  this  subsection shall establish and maintain a New York reserve for losses on  qualifying real property  loans,  a  New  York  reserve  for  losses  on  nonqualifying loans and a supplemental reserve for losses on loans. Such  reserves  shall be maintained for all subsequent taxable years that this  subsection  applies  to  the  taxpayer. (ii)  For   purposes   of   this  subsection,  such  reserves  shall be treated as reserves for bad debts,  but no deduction shall be allowed for any addition to  the  supplemental  reserve  for  losses on loans. (iii) Except as noted below, the balances  of each such reserve at the beginning of the  first  day  of  the  first  taxable  year  beginning  after  December thirty-first, nineteen hundred  ninety-five shall be the same as the  balances  maintained  for  federal  income tax purposes in accordance with section 593(c)(1) of the internal  revenue  code as in existence on December thirty-first, nineteen hundred  ninety-five for the last day of  the  last  tax  year  beginning  before  January  first, nineteen hundred ninety-six. A taxpayer which maintained  a New York reserve for loan losses on qualifying real property loans  in  the  last  tax  year  beginning  before  January first, nineteen hundred  ninety-six shall have a continuation of such New York reserve balance in  lieu of  the  amount  determined  under  the  preceding  sentence.  (iv)  Notwithstanding  clause  (ii) of this subparagraph, any amount allocated  to the reserve for losses on qualifying real property loans pursuant  to  section  593  (c)  (5)  of  the  internal  revenue  code  as  in  effect  immediately prior to the enactment of the Tax Reform Act of  1976  shall  not  be  treated  as  a reserve for bad debts for any purpose other than  determining the amount referred to  in  subparagraph  (B)  of  paragraph  three  of  this  subsection,  and  for such purpose such amount shall be  treated as remaining in such reserve.    (B) Any debt becoming worthless or partially worthless in respect of a  qualifying real property loan shall be charged to the reserve for losses  on such loans and any debt becoming worthless or partially worthless  in  respect  of  a  nonqualifying  loan  shall be charged to the reserve for  losses on nonqualifying loans, except that any such  debt  may,  at  the  election  of  the  taxpayer,  be  charged  in  whole  or  in part to the  supplemental reserve for losses on loans.    (C) The New York reserve for losses on qualifying real property  loans  shall  be  increased  by the amount determined under subparagraph (B) of  paragraph three of this subsection and the New York reserve  for  losseson nonqualifying loans shall be increased by the amount determined under  subparagraph (A) of paragraph three of this subsection.    (7)  (A)  For  purposes  of this subsection, the term "qualifying real  property loan" shall mean any loan secured by an  interest  in  improved  real  property or secured by an interest in real property which is to be  improved out of the proceeds of the loan. Such term  shall  include  any  mortgage-backed  security  which  represents  ownership  of a fractional  undivided interest in a trust, the assets of which consist primarily  of  mortgage loans, provided that the real property which serves as security  for  the  loans  is  (or from the proceeds of the loan, will become) the  type of property described in clauses (i) through  (v)  of  subparagraph  (B)  of  paragraph one of this subdivision. However, such term shall not  include: (i) any loan evidenced by a security  (as  defined  in  section  165(g)  (2) (C) of the internal revenue code); (ii) any loan, whether or  not evidenced by a security (as defined in such section 165(g) (2) (C)),  the  primary  obligor  of  which  is  (I)  a  government  or   political  subdivision  or  instrumentality thereof, (II) a banking corporation, or  (III) any corporation sixty-five percent or more of whose  voting  stock  is  owned or controlled, directly or indirectly, by the taxpayer or by a  banking corporation or bank  holding  company  that  owns  or  controls,  directly  or  indirectly, sixty-five percent or more of the voting stock  of the taxpayer; (iii) any loan, to the extent secured by a  deposit  in  or  share  of  the  taxpayer; or (iv) any loan which, within a sixty-day  period beginning in one taxable year of the creditor and ending  in  its  next  taxable  year, is made or acquired and then repaid or disposed of,  unless the transactions by which such loan was made or acquired and then  repaid or disposed of are established  to  be  for  bona  fide  business  purposes.    (B)  For  purposes  of  this subsection, the term "nonqualifying loan"  shall mean any loan which is not a qualifying real property loan.    (C) For purposes of this subsection, the term "loan" shall mean  debt,  as the term "debt" is used in section 166 of the internal revenue code.    (D) A regular or residual interest in a REMIC, as such term is defined  in  section  860D  of  the  internal revenue code, shall be treated as a  qualifying real property loan, except that,  if  less  than  ninety-five  percent  of  the assets of such REMIC are qualifying real property loans  (determined as if the taxpayer held  the  assets  of  the  REMIC),  such  interest  shall be so treated only in the proportion which the assets of  such REMIC consist of such loans. For purposes  of  determining  whether  any  interest  in  a  REMIC  qualifies under the preceding sentence, any  interest in another REMIC held by such  REMIC  shall  be  treated  as  a  qualifying real property loan under principles similar to the principles  of  the  preceding  sentence,  except  that if such REMICS are part of a  tiered structure, they shall be treated as one  REMIC  for  purposes  of  this paragraph.    (8)(A)  Any  distribution of property (as defined in section 317(a) of  the internal revenue code) by a thrift institution to a shareholder with  respect to its stock,  if  such  distribution  is  not  allowable  as  a  deduction under section 591 of such code, shall be treated as made    (i)  first  out  of  its  New York earnings and profits accumulated in  taxable years beginning after December  thirty-first,  nineteen  hundred  fifty-one, to the extent thereof,    (ii)  then  out  of the New York reserve for losses on qualifying real  property loans, to the extent  additions  to  such  reserve  exceed  the  additions  which  would  have  been allowed under paragraph five of this  subsection,    (iii) then out of the supplemental reserve for losses on loans, to the  extent thereof,(iv) then out of such other accounts as may be proper.  This  subparagraph  shall  apply  in  the  case  of  any distribution in  redemption of stock or in partial or complete liquidation  of  a  thrift  institution,  except that any such distribution shall be treated as made  first out of the amount referred to in clause (ii)  of  this  paragraph,  second  out of the amount referred to in clause (iii) of this paragraph,  third out of the amount referred to in clause (i) of this paragraph  and  then  out  of  such  other  accounts as may be proper. This subparagraph  shall not apply to any transaction to which section  381  of  such  code  (relating  to carryovers and certain corporate acquisitions) applies, or  to  any  distribution  to  the  federal  savings  and   loan   insurance  corporation  or  the federal deposit insurance corporation in redemption  of an interest in an association or institution, if  such  interest  was  originally   received   by   the  federal  savings  and  loan  insurance  corporation or the federal deposit insurance corporation in exchange for  financial assistance pursuant to section 406(f) of the federal  national  housing  act  or  pursuant  to subsection (c) of section thirteen of the  federal deposit insurance act.    (B) If any distribution is treated  under  subparagraph  (A)  of  this  paragraph  as  having been made out of the reserves described in clauses  (ii) and (iii) of such subparagraph, the  amount  charged  against  such  reserve  shall  be  the  amount which, when reduced by the amount of tax  imposed  under  the  internal  revenue  code  and  attributable  to  the  inclusion of such amount in gross income, is equal to the amount of such  distribution;  and  the  amount so charged against such reserve shall be  included in the entire net income of the taxpayer.    (C) (i) For purposes of  clause  (ii)  of  subparagraph  (A)  of  this  paragraph,  additions  to  the New York reserve for losses on qualifying  real property loans for the  taxable  year  in  which  the  distribution  occurs shall be taken into account.    (ii)  For  purposes of computing under this subsection the amount of a  reasonable addition to the New York reserve  for  losses  on  qualifying  real  property loans for any taxable year, the amount charged during any  year to such reserve pursuant to the provisions of subparagraph  (B)  of  this paragraph shall not be taken into account.    (9)  A  taxpayer  which  maintains  a  New  York reserve for losses on  qualifying real property loans and which ceases to meet  the  definition  of  a thrift institution as defined in paragraph one of this subsection,  must include in its entire net income for the  last  taxable  year  such  paragraph  applied  the  excess  of  its  New York reserve for losses on  qualifying real property loans over the greater of (A) its  reserve  for  losses  on qualifying real property loans as of the last day of the last  taxable year such reserve is maintained for federal income tax  purposes  or (B) the balance of the New York reserve for losses on qualifying real  property  loans  which  would  be allowable to the taxpayer for the last  taxable year such taxpayer met such definition of a  thrift  institution  if  the taxpayer had computed its reserve balance pursuant to the method  described in subparagraph (A) of paragraph one of subsection (i) of this  section.    (i) (1) For taxable years beginning before January first, two thousand  ten, a taxpayer subject to the  provisions  of  section  585(c)  of  the  internal  revenue code and not subject to subsection (h) of this section  may, in computing entire net income, deduct an amount equal to  or  less  than  the  amount  determined  pursuant  to  subparagraph  (A)  of  this  paragraph or subparagraph (B) of this paragraph, whichever  is  greater.  Provided,  however,  in  no  event  shall the deduction be less than the  amount determined pursuant to such subparagraph (A).(A) The amount determined pursuant to this subparagraph shall  be  the  amount  necessary  to  increase  the balance of its New York reserve for  losses on loans (at the close of the taxable year) to the  amount  which  bears  the  same  ratio to loans outstanding at the close of the taxable  year  as  (i)  the total bad debts sustained during the taxable year and  the  five  preceding  taxable  years  (or,  with  the  approval  of  the  commissioner  of  taxation  and finance, a shorter period), adjusted for  recoveries of bad debts during such period, bears to (ii) the sum of the  loans outstanding at the close of such six or fewer taxable years.    (B) (i) The amount determined pursuant to this subparagraph  shall  be  the amount necessary to increase the balance of its New York reserve for  losses on loans (at the close of the taxable year) to the lower of --    (I) the balance of the reserve at the close of the base year, or    (II)  if  the  amount of loans outstanding at the close of the taxable  year is less than the amount of loans outstanding at the  close  of  the  base year, the amount which bears the same ratio to loans outstanding at  the close of the taxable year as the balance of the reserve at the close  of  the  base year bears to the amount of loans outstanding at the close  of the base year.    (ii) For purposes of this paragraph, the base year shall  be  (I)  for  taxable  years  beginning  in  nineteen  hundred  eighty-seven, the last  taxable year before the most recent adoption of  the  experience  method  for  federal  income  tax  purposes  or  for  purposes  of this article,  whichever is  earlier,  and  (II)  for  taxable  years  beginning  after  nineteen  hundred  eighty-seven,  the last taxable year beginning before  nineteen hundred eighty-eight.    (2) (A) For taxable years beginning before January first, two thousand  ten, each taxpayer described in paragraph one of this  subsection  shall  establish  and  maintain  a  New  York reserve for losses on loans. Such  reserve shall be  maintained  for  all  subsequent  taxable  years.  The  balance  of the New York reserve for losses on loans at the beginning of  the first day of the first taxable year the taxpayer becomes subject  to  this  subsection  shall  be  the same as the balance at the beginning of  such day of the reserve for  losses  on  loans  maintained  for  federal  income  tax  purposes. The New York reserve for losses on loans shall be  reduced by an amount equal to the deduction allowed, but not  more  than  the  amount  allowable,  for  worthless  debts  for  federal  income tax  purposes pursuant to section 166 of the internal revenue code  plus  the  amount, if any, charged against its reserve for losses on loans pursuant  to section 585(c)(4) of such code.    (B)  For  purposes  of  subparagraph (A) of this paragraph, a taxpayer  which had previously been subject to the provisions of subsection (h) of  this section shall establish a New York  reserve  for  losses  on  loans  equal  to  the  sum of (i) the greater of (I) the balance of its federal  reserve for losses on qualifying real property loans as of the first day  of the first taxable year the taxpayer becomes subject to the provisions  of this subsection or (II) the greater of the amounts  determined  under  subparagraphs  (A)  and  (B) of paragraph nine of subsection (h) of this  section in the year such paragraph applied to  the  taxpayer,  (ii)  the  greater  of  (I)  the  balance  in  its  federal  reserve  for losses on  nonqualifying loans as of the first day of the first  taxable  year  the  taxpayer  becomes  subject to this subsection or (II) the balance in its  New York reserve for losses on nonqualifying loans as of the  last  date  the  taxpayer  was  subject  to the provisions of subsection (h) of this  section and (iii) the balance in its supplemental reserve for losses  on  loans  as of the last date the taxpayer was subject to the provisions of  subsection (h) of this section.(3) The determination and treatment of the New York  reserve  balance,  including  any  additions  thereto, subtractions therefrom, or recapture  thereof, for    (A)  any  banking  corporation  which  was  subject to tax for federal  income tax purposes but not subject to tax under this article for  prior  taxable years,    (B) any taxpayer which ceases to be subject to tax under this article,  or    (C) any other unusual circumstances  shall  be  determined  by  the  commissioner  of  taxation  and finance.  Provided, however, any banking corporation which was subject to tax  for  federal  income  tax  purposes but not subject to tax under this article  for prior taxable years shall have as its opening New York  reserve  for  losses  on  loans  the  amount  determined by applying the provisions of  subparagraph  (A)  of  paragraph  one  of  this  subsection   to   loans  outstanding at the close of its last taxable year for federal income tax  purposes  ending  prior to the first taxable year for which the taxpayer  is subject to tax under this article and  provided,  further,  that  the  provisions of subparagraph (B) of paragraph one of this subsection shall  not apply.    (j)  (1)  In  the  case of property placed in service prior to January  first, nineteen hundred seventy-three, for which the  taxpayer  properly  adopted  a  different method of computing depreciation under section two  hundred nineteen-z or section two hundred nineteen-xx  of  this  chapter  (as  such  sections  were  in effect on or before December thirty-first,  nineteen hundred seventy-two) than was adopted for  federal  income  tax  purposes  with  respect  to  such property, entire net income under this  article shall be computed without regard to the amount  allowable  as  a  deduction for depreciation of such property in computing federal taxable  income  for  the taxable year but, in lieu thereof, shall be computed as  if such deduction were determined by the method of depreciation  adopted  with  respect  to such property under sections two hundred nineteen-z or  two hundred nineteen-xx of this chapter (as such sections were in effect  on or before December thirty-first, nineteen hundred seventy-two).    (2) In  computing  entire  net  income,  the  amount  allowable  as  a  deduction  for  charitable contributions for federal income tax purposes  shall be decreased by any amount allowed  as  a  deduction  for  federal  income  tax  purposes  for  the  taxable  year under section one hundred  seventy  of  the  internal  revenue  code  as  a  carryover  of   excess  contributions  which  are  not  made in such taxable year and which were  deductible in computing the tax due under article nine-B  or  nine-C  of  this  chapter  (as  such  articles  were in effect on or before December  thirty-first, nineteen hundred seventy-two).    (3) 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  was deductible as a loss in computing the tax due under  article  nine-B  or  nine-C  of this chapter (as such articles were in effect on December  thirty-first, nineteen hundred seventy-two).    (4) 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  that  such  income  or  gain  was includible in the computation of the tax due  under article nine-B or nine-C of this chapter (as such articles were in  effect on December thirty-first, nineteen hundred seventy-two).(5) To the extent not otherwise provided in this article, there  shall  be  excluded  from entire net income the amount necessary to prevent the  taxation under this article of any other amount of income or gain  which  was  properly  included  in income or gain and was taxable under article  nine-B  or nine-C of this chapter (as such articles were in effect on or  before December thirty-first, nineteen hundred  seventy-two)  and  there  shall  be  disallowed  as a deduction in computing entire net income any  amount which was allowable as a deduction in computing the tax due under  such  articles  (as  they  were  in  effect  on   or   before   December  thirty-first, nineteen hundred seventy-two).    (k)  (1) At the election of the taxpayer, there shall be deducted from  the portion of  its  entire  net  income  allocated  within  the  state,  depreciation with respect to any property such as described in paragraph  two  of  this  subsection,  not exceeding twice the depreciation allowed  with respect to the same property for federal income tax purposes.  Such  deduction shall be allowed only upon condition that entire net income be  computed  without  any deduction for depreciation or amortization of the  same property, and the total of all  deductions  allowed  under  article  nine-B  or nine-C of this chapter (as such articles were in effect on or  before December thirty-first, nineteen  hundred  seventy-two)  and  this  article in any taxable year or years with respect to the depreciation of  any such property shall not exceed its cost or other basis.    (2)  Such  deduction  shall  be  allowed only with respect to tangible  property  which  is  depreciable  pursuant  to   section   one   hundred  sixty-seven  of  the internal revenue code, having a situs in this state  and used in the taxpayer's business, (i) constructed,  reconstructed  or  erected  after  December  thirty-first,  nineteen  hundred  sixty-three,  pursuant to a contract which was, on or  before  December  thirty-first,  nineteen  hundred  sixty-seven,  and at all times thereafter, binding on  the taxpayer or, property, the physical construction, reconstruction  or  erection  of  which  began  on or before December thirty-first, nineteen  hundred sixty-seven or which began after such date pursuant to an  order  placed on or before December thirty-first, nineteen hundred sixty-seven,  and then only with respect to that portion of the basis thereof which is  properly  attributable  to such construction, reconstruction or erection  after December  thirty-first,  nineteen  hundred  sixty-three,  or  (ii)  acquired  after  December  thirty-first,  nineteen  hundred sixty-three,  pursuant to a contract which was, on or  before  December  thirty-first,  nineteen  hundred  sixty-seven,  and at all times thereafter, binding on  the taxpayer or pursuant to  an  order  placed  on  or  before  December  thirty-first,  nineteen  hundred  sixty-seven, by purchase as defined in  section one hundred seventy-nine (d) of the internal  revenue  code,  if  the original use of such property commenced with the taxpayer, commenced  in  this  state  and  commenced  after  December  thirty-first, nineteen  hundred sixty-three, or (iii) acquired, constructed,  reconstructed,  or  erected   subsequent   to   December   thirty-first   nineteen   hundred  sixty-seven,  if  such  acquisition,  construction,  reconstruction   or  erection  is  pursuant  to a plan of the taxpayer which was in existence  December thirty-first, nineteen hundred sixty-seven and  not  thereafter  substantially    modified,    and    such   acquisition,   construction,  reconstruction or erection would qualify under the rules  in  paragraphs  four,  five  or  six  of  subsection  (h)  of section forty-eight of the  internal revenue code provided all references in such  paragraphs  four,  five  and six to the dates October nine, nineteen hundred sixty-six, and  October ten, nineteen hundred  sixty-six,  shall  be  read  as  December  thirty-first,  nineteen hundred sixty-seven. A taxpayer shall be allowed  a deduction under clauses (i), (ii) or (iii) of this paragraph  only  if  the   tangible   property   shall  be  delivered  or  the  construction,reconstruction or erection shall be  completed  on  or  before  December  thirty-first,  nineteen  hundred  sixty-nine,  except  in  the  case  of  tangible property  which  is  acquired,  constructed,  reconstructed  or  erected  pursuant  to  a  contract  which  was,  on  or  before December  thirty-first, nineteen hundred sixty-seven, and at all times thereafter,  binding on  the  taxpayer.  Provided,  however,  for  any  taxable  year  beginning  on  or  after  January first, nineteen hundred sixty-eight, a  taxpayer shall not be allowed a deduction  under  paragraph  (1)  hereof  with  respect  to  tangible  personal property leased by it to any other  person or corporation. For  purposes  of  the  preceding  sentence,  any  contract  or  agreement  to  lease  or rent or for a license to use such  property shall be considered a lease. With respect to property which the  taxpayer uses itself for purposes other  than  leasing  for  part  of  a  taxable year and leases for a part of a taxable year, the taxpayer shall  be  allowed a deduction under paragraph (1) in proportion to the part of  the year it uses such property.    (3) If the deduction allowable for any taxable year pursuant  to  this  subsection  exceeds  the  portion  of  the  taxpayer's entire net income  allocated to this state for such year, the excess may be carried over to  the following taxable year or years and may be deducted from the portion  of the taxpayer's entire net income allocated to  this  state  for  such  year or years.    (4)  In  any  taxable year when property is sold or otherwise disposed  of, with respect to which a deduction has been allowed pursuant to  this  subsection,  subdivision  twelve  of