§ 17. Resident partners.--(a) Partner's modifications.--In determining
city adjusted gross income and city taxable income of a resident
partner, any modification described in subdivisions (b), (c) or (d) of
section twelve, subdivision (c) of section fifteen or paragraphs two or
three of subdivision (d) of such section, which relates to an item of
partnership income, gain, loss or deduction shall be made in accordance
with the partner's distributive share, for federal income tax purposes,
of the item to which the modification relates. Where a partner's
distributive share of any such item is not required to be taken into
account separately for federal income tax purposes, the partner's
distributive share of such item shall be determined in accordance with
his distributive share, for federal income tax purposes, of partnership
taxable income or loss generally.

(b) Character of items.--Each item of partnership income, gain, loss,
or deduction shall have the same character for a partner under this
local law as for federal income tax purposes. Where an item is not
characterized for federal income tax purposes, it shall have the same
character for a partner as if realized directly from the source from
which realized by the partnership or incurred in the same manner as
incurred by the partnership.

(c) City tax avoidance or evasion.--Where a partner's distributive
share of an item of partnership income, gain, loss or deduction is
determined for federal income tax purposes by special provision in the
partnership agreement with respect to such item, and where the principal
purpose of such provision is the avoidance or evasion of tax under this
local law, the partner's distributive share of such item, and any
modification required with respect thereto, shall be determined as if
the partnership agreement made no special provision with respect to such
item.