NY help please - NY K-1 versus NY K-1 letter

[Catherine]

Hi folks -- have a situation that has me flummoxed.

Client got a K-1 from an estate -- only items are final year deductions (Lines 11 A, B, and C -- final year excess deductions for Schedule A, short-term capital loss on Sch D line 5, and long-term capitol loss on Sch D Line 12). OK; no big deal, got it. There are NO other entries on the Federal K-1.

Then we get to the NY K-1. Starts with a paragraph stating, "As a beneficiary of a NY Estate, you may be subject to state tax on your NY source income. See K-1 for NY. Information provided to assist in preparation of MA tax return."

Then below, it shows:

5.3% Income

Dividends $14

Other non-Massachusetts interest $1,203

After that, there is the actual NY K-1 showing short-term capital loss of $5 and long-term capital loss of $13K in the NY non-resident beneficiary information section.

Now this looks, at first glance, like there is reportable interest and dividends in MA -- until you get to the K-1 itself, which shows nothing of the sort. Does anyone here have a clue as to why the NY K-1 instruction LETTER shows income where the actual NY K-1 shows nothing but capital losses?

TIA,

Catherine

[michaelmars]

FORGET IT portfolio income is not taxable to non residents unless it is from a sale of a business or building etc. besides, those amounts are too small to require a return in NY if the taxpayer has nothing else subject to ny tax