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may not exceed the amount referenced on line 4 (dividends included in the combined group’s taxable

income) less the amount referenced on line 24 (dividend deduction for utility corporations) times 95%.

Line 26. If one or more members of the combined group has intangible expenses and costs paid or

accrued to any related party and qualifies to deduct these expenses under c. 63 § 31I and 31K, enter the

amount of the deduction claimed here and complete Schedule ABIE. No deduction is allowed for any

amount not added back into income and referenced on line 17. Note that each

Schedule ABIE must have the same unitary business identifier as the Schedule U-E to which it relates.

The total amount of the deduction claimed must match the total on line 5 of all Schedules ABIE with the

same unitary business identifier and may not exceed the amount added back on line 17.

Line 27. If one or more members of the combined group has interest expenses and costs paid or accrued

to any related party and qualifies to deduct these expenses under c. 63 § 31J and 31K, enter the amount of

the deduction claimed here and complete Schedule ABI. No deduction is allowed for any amount not

added back into income and referenced on line 18. Note that each Schedule ABI must have the same

unitary business identifier as the Schedule U-E to which it relates. The total amount of the deduction

claimed must match the total on line 4 of all Schedules ABI with the same unitary business identifier and

may not exceed the amount added back on line 18.

Line 28. Enter any allowable U.S. wage credit used in calculating U.S. Form 1120, line 13.

Line 29. The adjustments to be referenced on this line include basis adjustments and other state-federal

tax differences that were not previously taken into account.

Charitable contributions that are considered in the calculation of the combined group’s taxable income are

limited as provided in section 170 of the Internal Revenue Code but the limitation is determined by

reference to the combined group’s taxable income. See 830 CMR 63.32B.2(6)(c) 6. Where the total of the

group’s contributions that would otherwise be deductible exceeds the amount allowable, the contributions

of the individual members are allowed on a pro-rata basis and the disallowed amounts are deductible

against the other income of the individual member that made the charitable contribution in question,

subject to a separately calculated limitation with respect to that other income. Amounts disallowed as a

deduction that cannot be deducted from the separate income of the member are carried forward to future

years.

This line may also be used to reflect other differences in limitations that are to be applied to

Massachusetts tax calculations, such as deductions that are to be based on a percentage of income as

determined under the Internal Revenue Code. See 830 CMR 63.32B.2(6)(c) 10.

Enter amounts reducing Massachusetts net income as positive amounts.

Line 30. Subtract the total of lines 22 through 29 from the amount on line 21.

Line 31. Enter the amount of capital gain or loss (including capital gains and losses of both taxable and

non-taxable members) included in line 30. To the extent that adjustments on Schedule U-E represent

adjustments to capital gain or loss as reported on a member’s U.S. tax return, the amount of capital gain

or loss on this line must also be adjusted.

Line 32. Enter the amount of section 1231 gain or loss (including section 1231 gains and losses of both

taxable and non-taxable members) included in line 30. To the extent that adjustments on Schedule U-E

represent adjustments to these gains or losses as reported on a member’s federal tax return, the amount of

section 1231 gain or (loss) must also be adjusted.

Line 33. Subtract the total of lines 31 and 32 from line 30.

Line 34. Enter the amount of the combined group’s net capital loss (if any) that is not deductible in

determining in determining whether or not apportionment factors are inapplicable under 830 CMR

Instructions For Schedule U-E - Massachusetts Unitary Or Affiliated Group Income - 2012 Page 4