New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCE
Chapter I - Franchise and Certain Business Taxes
Subchapter F - Tax On The Furnishing Of Utility Services
Part 45 - Gross Income
Section 45.10 - Profits from the sale of securities

(a) The law provides that there shall be included in gross income "profits from the sale of securities". Securities include generally stocks, bonds, rights to stock, etc.

(b) The essential nature of the transaction determines whether there is one or more sales involved. For example, a utility during the reporting period sells stock in two different corporations realizing a gain in one case and a loss in the other. The transaction is considered as two sales and the profit is required to be included in gross income without any deduction on account of the loss sustained. If, however, a utility carries a block of 10,000 shares of the same securities of a corporation in its portfolio and orders its broker to sell the entire block, the fact that the broker executes the order by disposing of the block in several lots does not change the essential nature of the transaction and make it more than one sale. In determining the profit from this transaction, the net amount is required to be included in gross income so that if, during the reporting period, some portion of the above mentioned securities are sold at a gain and some at a loss, only the net profit is taxable. This transaction is considered as one sale for purposes of this tax.

Question 43:A utility sells 1,000 shares of the stock of A corporation during the month of November, 1950, and realizes a profit of $5,000. During the same month, it sells 500 shares of the stock of B corporation and sustains a loss of $1,500. What amount is includible in gross income? Answer: $5,000.

Question 44:A utility sells 100 United States Government bonds and 10 bonds of the State of New York realizing a profit on each sale. Must the profits on such sales be included in gross income? Answer: Yes, profits on the sale of tax exempt securities are taxable.

Question 45:Is profit realized by a utility on the sale of reacquired stock, or of securities of an affiliated company required to be included in its gross income? Answer: Yes.