1. (a) A taxpayer which is entitled to allocate taxable assets within and without New York State for only part of a taxable year allocates its taxable assets for only that part of the taxable year during which it is entitled to allocate. (See section 19-4.1 of this Part—General rules for allocation of taxable assets.) A taxpayer subject to a tax for a period other than 12 calendar months, computes its prorated taxable assets pursuant to section 18-5.7 of this Title, and computes its asset allocation percentage only for that part of the taxable year during which it is entitled to allocate.

   1. (1) The asset allocation percentage is applied to taxable assets which have been prorated for the period for which the taxpayer is entitled to allocate. In the case of a taxpayer subject to tax for a period other than 12 months, the asset allocation percentage is applied to taxable assets which:

      1. (i) have been prorated, pursuant to section 18-5.7 of this Title, for the period during which the taxpayer is subject to tax; and
      2. (ii) have been prorated for the period during which the taxpayer is entitled to allocate.

   2. (2) Taxable assets (or prorated taxable assets) are prorated for the period the taxpayer is entitled to allocate, and are computed as follows:

      1. (i) divide taxable assets (or prorated taxable assets) by the number of calendar months or major parts thereof covered by the taxpayer's New York State return; and
      2. (ii) multiply the amount determined in paragraph (1) of this subdivision by the number of calendar months or major parts thereof for which the taxpayer is entitled to allocate.
   3. (3) After taxable assets (or prorated taxable assets) have been prorated for the period for which the taxpayer is entitled to allocate, the remaining portion of taxable assets (or prorated taxable assets) will be allocated at either 100 percent or zero percent, depending on whether the taxpayer's business was conducted solely within or solely without New York State.

   (b)

2. (c) If, in the opinion of the Tax Commission, the method described in this section for prorating taxable assets (or prorated taxable assets) for the period during which the taxpayer is entitled to allocate does not properly reflect the taxable assets (or prorated taxable assets) for the period during which it is entitled to allocate and for the remaining period, the Tax Commission may determine taxable assets solely on the basis of the taxable assets properly recorded on the taxpayer's books and records during such periods.

3. (d) The short period asset allocation percentage is determined in the same manner as the asset allocation percentage described in section 19-4.2 of this Part, except that:

   1. (1) the payroll factor is computed only for the period for which the taxpayer is entitled to allocate;
   2. (2) the receipts factor is computed only for the period for which the taxpayer is entitled to allocate; and

   3. (3) the deposits factor is computed only for the period for which the taxpayer is entitled to allocate.

      A taxpayer must submit complete details with its return, showing how it computed each factor of the short period asset allocation percentage.

4. (e) The following is an example illustrating the computation of the asset allocation percentage for a short period and the application of this percentage to taxable assets:

   Example:

   A taxpayer, which was subject to tax for all of 1985, reports on a calendar-year basis and had taxable assets of $1,800,000 for such taxable year 1985. On February 11, 1985 the taxpayer began doing business both within and without New York State, which entitled it to allocate for the period February 11, 1985 through December 31, 1985. For the short period February 11, 1985 through December 31, 1985 (11 months), the taxpayer had the following: *

   	New York State	Total
   Payroll	$ 73,000*	$ 100,000
   Receipts	720,000	900,000
   Deposits	855,000	1,125,000

   *

   80% of the New York State amount.

   The taxpayer's short period asset allocation percentage is computed as follows:

   Payroll factor [($73,000 / $100,000) × 100]	73%
   Receipts factor [($720,000 / $900,000) × 100]	80%
   Deposits factor [($855,000 / $1,125,000) × 100]	76%
   Receipts factor [($720,000 / $900,000) × 100]	80%
   Deposits factor [($855,000 / $1,125,000) × 100]	76%
   Total	385%

   The short period asset allocation percentage is 77% (385% ÷ 5). The amount of the taxpayer's taxable assets allocated to New York State is $1,420,500, computed as follows:

   $1,800,000 / 12 (months) = $150,000
   $150,000 × 11 (months) = $1,650,000
   $1,650,000 × 77% = $1,270,500
   $1,800,000 $1,650,000 = $150,000
   Taxable assets allocated at 100%	$ 150,000
   Taxable assets allocated at 77%	1,270,500
   Total allocated taxable assets	$1,420,500

Tax Law, § 1454