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All of the Schedules ABI, ABIE, and U-DRD that relate to deductions taken on Schedule U-E with a

unitary business identifier “1” must also have an identifier “1”. All of the Schedules ABI, ABIE, and U-

DRD that relate to deductions taken on Schedule U-E with a unitary business identifier of “2” must also

have an identifier of “2”.

All of the Schedules U-MSI that apportion income from the unitary business referenced on Schedule U-E

with a unitary business identifier “1” must also have identifier “1”.

Check one box for the “type of group.” A financial group is a combined group engaged in a unitary

business or a Massachusetts affiliated group all of whose members, including members not taxable on

their income in Massachusetts, are entities that qualify as financial institutions under the definition in

M.G.L. c. 63, § 1. A non-financial group is a group none of whose members, including non-taxable

members, are financial institutions. A mixed group is any group that includes at least one member that is a

financial institution and at least one member that is not a financial institution. If the combined group

includes two or more Schedules U-E, representing multiple unitary businesses, only those members

participating in the unitary business that is to be referenced on the U-E in question should be considered

in determining which box to check.

Check one box to indicate whether any member of the combined group is taxable on its income in another

state. In any case where the combined group has not made an affiliated group election, check “yes” only if

a member of the combined group is taxable in another state with respect to the operation of the combined

group’s unitary business. Note that if no member of the combined group is taxable in another state (i.e.,

the box to be checked is “no”), combined reporting is still required but special income attribution rules

will apply. See 830 CMR 63.32B.2 (7) (k).

If the combined group includes at least one financial institution (i.e., it is a group consisting only of

financial institutions or is a “mixed group”), check one box to indicate the method to be used by the group

to allocate income from investment assets and trading assets. If the combined group does not include a

financial institution, do not check either option. If this section applies, see c. 63, s. 2A (d) (xii) for an

explanation of the referenced income allocation methods.

Line Instructions for Schedule U-E

Part 1

Taxable Income Lines 1 – 13. Report the income and expenses of the unitary business engaged in by the

combined group, or in the case of a combined group subject to an affiliated group election, report all of

the income and expenses of the combined group. Note that line 8 may be a negative number and that the

total in line 11 will reflect that negative amount, if applicable. If only one Schedule U-E is being filed, the

amounts on lines 1 through 11 must match the amounts on Schedule U-CI, lines 1 through 11.

Line 14. Enter the total of all interest received on state and municipal obligations not reported in U.S. net

income but includible in the combined group’s taxable income.

Line 15. Massachusetts does not allow a deduction for state, local and foreign income, franchise, excise

or capital stock taxes. Any such taxes that have been deducted from U.S. net income should be entered

here and added back into the combined group’s taxable income.

Line 16. For Massachusetts purposes, for taxable years ending after September 10, 2001, depreciation is

to be claimed on all assets, regardless of when they are placed in service, using the method used for U.S.

income tax purposes prior to the enactment of IRC § 168(k). For more information, see TIR 02-11 and

TIR 03-25. Enter the difference between the amount deducted for U.S. income tax purposes and the

amount deductible for Massachusetts purposes. If the depreciation calculated for Massachusetts purposes

exceeds the amount deducted for U.S. income tax purposes, this will be a negative amount.

Line 17. A taxpayer must add back to net income any related member intangible expenses and costs,

including losses incurred in connection with factoring or discounting transactions. See 830 CMR 63.31.1.

Instructions For Schedule U-E - Massachusetts Unitary Or Affiliated Group Income - 2012 Page 2

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