Taxpayer lives in Westchester, has home office, and also has an office in NYC. His NYC office rent is 36,529, and home office is 1,500.
Instructions state that the allocation formula is NYC gross income divided by the total gross income. The calculation on form NYC-202 then multiplies the gross income percent by the net income on schedule C.
That calculation becomes the UBT NYC taxable income. As a result the NYC rent is then not all deductible, even though it is all attributed to NYC. This seems unfair. Am I reading it correctly. Is there another method one can use for the allocation.
Thanks in advance for your responses.
Barry Siegel, CPA