(b) Husband and wife.--(1) A husband and wife, both of whom are required to file returns under this local law, shall be allowed city itemized deductions only if both elect to take city itemized deductions.

(2) The total of the city itemized deductions of a husband and wife whose federal taxable income is determined on a joint return, but whose city taxable incomes are determined separately, may be taken by either or divided between them as they may elect.

(c) Modifications reducing federal itemized deductions.-- The total amount of deductions from federal adjusted gross income shall be reduced by the amount of such federal deductions for:

(1) income taxes imposed by the city, this state or any other taxing jurisdiction;

(2) interest on indebtedness incurred or continued to purchase or carry obligations or securities the income from which is exempt from tax under this local law; and

(3) ordinary and necessary expenses paid or incurred during the taxable year for (A) the production or collection of income which is exempt from tax under this local law, or (B) the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is exempt from tax under this local law.

(d) Modifications increasing federal itemized deductions.--The total amount of deduction from federal adjusted gross income shall be increased by:

(1) an amount, not exceeding one hundred fifty dollars in the aggregate, for net premiums paid or incurred by a taxpayer during the taxable year with respect to any life insurance or endowment policy upon his life;

(2) interest on indebtedness incurred or continued to purchase or carry obligations or securities the income from which is subject to tax under this local law but exempt from federal income tax, to the extent that such interest is not deductible for federal income tax purposes and is not subtracted from federal adjusted gross income pursuant to paragraph six of subdivision (c) of section twelve; and

(3) ordinary and necessary expenses paid or incurred during the taxable year for (A) the production or collection of income which is subject to tax under this local law but exempt from federal income tax, or (B) the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this local law but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are not subtracted from federal adjusted gross income pursuant to paragraph seven of subdivision (c) of section twelve.

(e) Partners.-- The amounts of modifications under subdivision (c) or under paragraphs two or three of subdivision (d) required to be made by a partner with respect to items of deduction of a partnership shall be determined under section seventeen.