Schedule Abie - Exceptions To The Add Back Of Intangible Expenses

Exception 4.

Exception based on supporting statement for loss incurred in a factoring or discounting transaction with 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

01 Amount of deductible discounting or factoring loss claimed by taxpayer. Enter the result here and in Total Exceptions Claimed,

line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

02 Name of the related member to which the taxpayer incurred the discounting or factoring loss

03 FID of the related member to which the taxpayer incurred the discounting or factoring loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

04 If the discounting or factoring loss was pursuant to an arrangement or agreement with a fixed term, enter the termination date 4

05 If the discounting or factoring loss was incurred pursuant to a written contract, enter the contract date . . . . . . . . . . . . . . . . . . . 5

06 If the amount of the discounting or factoring loss is the result of or supported by a written study or appraisal, enter the

date of the study or appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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

resident . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

08 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

09 Was the structure used to effect the discounting or factoring transaction(s) entered into in whole or in part on the advice of a tax advisor?

Yes

10 Was reduction of tax a principal purpose for the structure used to effect the discounting or factoring transactions or the transactions themselves?

Yes

11 Were some or all of any receivables sold in the discounting or factoring transaction(s) generated by the taxpayer in the ordinary course of its business?

Yes

12 Were some or all of any receivables sold in the discounting or factoring transaction(s) originally acquired by the taxpayer from another party?

Yes

13 Was the discounting or factoring loss incurred as part of an attempt by the taxpayer or a related member to securitize the underlying receivables?

Yes

14 If the answer to the above question is yes, does the taxpayer service the receivables?

Yes

15 Does the taxpayer initiate or pursue any activities on delinquent accounts?

Yes

16 The taxpayer may use the space below to provide greater detail concerning its Exception 4 claim.