Schedule Abie - Exceptions To The Add Back Of Intangible Expenses

Exception 3.

Exception based on supporting statement for direct or indirect intangible expense or cost paid, accrued or incurred to a

related member.

The taxpayer must prepare with its tax return and make available to the Commissioner upon request a supporting statement prepared in accordance

with the Department’s public written statements. All double tax exception claims must be made by answering the questions set forth in Exception 1 or 2.

Check the basis for this claim:

Business purpose/economic substance

Section 31K foreign treaty exception

Conduit exception

01 Amount of deductible intangible expense or cost claimed by taxpayer. Enter the result here and in Total Exceptions Claimed,

line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

02 Name of the related member to which the taxpayer paid, accrued or incurred the intangible expense or cost

03 FID of the related member to which the taxpayer paid, accrued or incurred the intangible expense or cost . . . . . . . . . . . . . . . . 3

04 Name the type of intangible asset for which the expense or cost is being paid, accrued or incurred (e.g.,

trademarks, a patent, etc.). If more than one, name the type of asset that resulted in the biggest cost or expense

05 If the intangible expense or cost was paid as a percentage of income or receipts, enter the percentage (if the rate is

variable, enter the effective rate for the period covered by this tax return) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

06 If the intangible expense or cost was paid, accrued or incurred pursuant to an arrangement or agreement with a fixed

term, enter the termination date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

07 If the intangible expense or cost was paid, accrued or incurred pursuant to a written contract, enter the contract date . . . . . . . 7

08 If the amount of the intangible expense or cost is the result of or supported by a written study or appraisal, enter the date

of the study or appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

09 If the taxpayer is seeking the section 31K exception, enter the name of the foreign nation in which the related member is

resident . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

10 Did the taxpayer assert an add back exception in connection with the arrangement, agreement or contract on its Massachusetts return for a prior year?

Yes

11 Was the intangible expense or cost actually paid (e.g., as opposed to accrued)?

Yes

12 If the answer to question 11 is yes, was the amount paid substantially returned to the taxpayer, either directly or indirectly, during the tax year (e.g.,

through the means of a dividend, loan, etc.)?

Yes

13 Was the underlying transaction entered into in whole or in part on the advice of a tax advisor?

Yes

14 Was reduction of tax a principal purpose for the underlying transaction?

Yes

15 Were the intangible assets referenced in answer 4 primarily developed by the taxpayer?

Yes

16 Were the intangible assets referenced in answer 4 primarily developed by the related member?

Yes

17 Were the intangible assets referenced in answer 4 acquired by the related member from an unrelated party?

Yes