1. (a) The business capital of the taxpayer is determined by computing the total of the average value, during the period covered by the report, of all the assets of the taxpayer which constitute business capital, less the average value of liabilities not deducted in computing subsidiary capital or investment capital (see sections 3-3.3 and 3-3.6 of this Subpart).

2. (b) The amount of investment capital is determined as follows:

   1. (1) ascertain the average value of each item of investment capital (including cash, where the election described in paragraph (1) of subdivision (a) of section 3-3.2 of this Subpart is made);
   2. (2) ascertain the net value of each such item by subtracting from the average value of each such item average liabilities which are directly or indirectly attributable to that item; and

   3. (3) add the net values so arrived at.

      The average value of a marketable security included in investment capital is its average fair market value, and the average value of an item of investment capital which is not a marketable security is the average value shown (or which should have been shown, if not so shown) on the books and records of the taxpayer in accordance with generally accepted accounting principles.

3. (c) In determining the average value of assets, real property (such as buildings and land) and marketable securities are to be valued at fair market value, as defined in section 3-3.5 of this Subpart, and the value of personal property other than marketable securities shall be the value shown on the books and records of the taxpayer in accordance with generally accepted accounting principles (GAAP). Average value is determined in the manner described in section 3-3.6 of this Subpart.

Tax Law, § 210(2)