New York Tax Panel Rejects Couple’s Treatment of Bond Premiums

The New York Tax Appeals Tribunal sided with the state in a dispute over how a couple may treat premiums paid above face value for bonds issued by other states when calculating their state income.

New York residents Robert and Kira Ciardullo owe $21,414.50 and won’t get requested refunds totaling $46,251 for tax years 2012 to 2016 after the tribunal found the premiums must be added back to their New York adjusted gross income.

Interest income paid on the bonds, which are federally tax-exempt but taxable in New York, equals the gross interest income paid, including amortized bond premiums allocated ...