1. (a) If the entire net income required to be reported under article 32 of the Tax Law is for a period different than the period covered by the taxpayer's Federal income tax return, the taxpayer's entire net income must be prorated to correspond with the period covered by the return under article 32 of the Tax Law. The prorated entire net income is computed as follows:

   1. (1) adjust Federal taxable income in the manner set forth in sections 18-2.3 through 18-2.5 of this Subpart;
   2. (2) divide entire net income by the number of calendar months, or major parts thereof, covered by the return for Federal income tax purposes; and

   3. (3) multiply the result by the number of calendar months, or major parts thereof, covered by the return under article 32 of the Tax Law. Example:

      Example:

      A banking corporation organized in France has been doing business since 1973 in the United States and began to do business in New York State on May 10, 1985, and reports on a calendar-year basis. Its entire net income for calendar year 1985 is $12,000. For purposes of computing the tax measured by entire net income for taxable year 1985, entire net income must be divided by 12 and the result multiplied by 8 (the number of months from May to December), resulting in a prorated entire net income of $8,000.

2. (b) The method of computing entire net income for a short period, as set forth in this section, applies to taxpayers reporting on either a calendar-year or fiscal-year basis for Federal income tax purposes.
3. (c) If, in the opinion of the Tax Commission, the method described in this section does not properly reflect the taxpayer's entire net income for purposes of article 32 of the Tax Law during the period covered by its return, the Tax Commission may determine entire net income solely on the basis of the taxpayer's income during such period.

Tax Law, § 1453(k)