Instructions For Schedule U-M - Member'S Income And Expenses

Combined Reporting Instructions

2012 Schedule U-M Instructions

Member’s Income and Expenses

Schedule U-M is the starting point for the determination of the combined group’s taxable income. The

members of the combined group are to report their unadjusted income as determined for federal

income tax purposes in column (a) of this schedule, with further adjustments as required by

Massachusetts law to be reflected in columns (b) through (e), and a final statement of the member’s

Massachusetts combined group income or expense to be tallied in column (f). Each member of the

combined group, whether it is subject to taxation in Massachusetts or not, is to file a Schedule U-M; no

member is to submit more than one Schedule U-M. Any member that is the owner of a QSUB or any

other entity that is disregarded as a separate entity from its owner for federal tax purposes must

similarly include all income, assets and activities of the entity in filing its Massachusetts return. Any

member that takes a treaty based return position must file Schedule TTP identifying the treaty based

position.

If there are eliminations as to transactions between combined group members required under

Massachusetts law, these eliminations are to be referenced on a separate Schedule U-M (the

“eliminations schedule”), to be filed by the principal reporting corporation with the totals to be reported

in column (f). See below. The totals from column (f) for every Schedule U-M, including the eliminations

schedule, if any, are to be reported on Schedule U-CI.

Header for Schedule U-M

For each Schedule U-M filed, enter the name of the member (as shown on its federal income tax return,

if filed), its Federal Identification number and the beginning and ending dates of the combined group’s

taxable year. If the member is a non-U.S. corporation that does not have a Federal Identification

number, enter “Foreign” in the space provided for the FIN. Note that if the non-U.S. corporation is

taxable on its income in Massachusetts, the member will require a FIN to complete other schedules

required as part of the combined report.

For each Schedule U-M, indicate whether or not the member is a non-U.S. corporation.

For each Schedule U-M, indicate whether or not the member is claiming a treaty based income

exclusion. Non-U.S. corporations that are members of water’s edge group may exclude from a

Massachusetts combined return those items of income that are exempt from federal income tax due to

a federal tax treaty but must also submit Schedule TTP disclosing the position taken on Schedule TTP.

See Rules for Non-U.S. Corporations in a Water’s Edge Combined Group (below).

Instructions For Schedule U-M - Member'S Income And Expenses - 2012