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

line 4. In the case of dividends that are subject to elimination under 830 CMR 63.32B.2(6) or are eligible

for a dividends received deduction under c. 63, the elimination or deduction will be reported on

Schedule U-E.

Reducing the amount of any dividends paid deduction claimed for federal income tax purposes by a REIT

or a RIC that is a member of the combined group to the extent that such distribution is made to one or

more other group members and is eliminated under 830 CMR 63.32B.2(6)(c)4. See Directive 10-5.

Reversing the application of federal limitations and the use of federal carryovers in computing the

federal charitable contributions deduction shown on lines 19(a) or 19(b) as necessary to compute a

charitable contributions deduction for Massachusetts purposes, including (1) reversing any reduction in

the federal amounts required by a percentage of income limitation; (2) eliminating any contributions

included in the federal totals that represent contributions made in prior tax years and carried forward to

the current tax year for federal income tax purposes; and (3) increasing the contributions by any amount

disallowed in calculating net income for a Massachusetts return in the prior tax year based on the

percentage of income limitation. See 830 CMR 63.32B.2 (6) (c) 6.

Reversing federal adjustments made in the context of offsetting capital gains and losses and I.R.C. §

1231 gains and losses for federal income tax purposes so that this offset can be done for Massachusetts

income tax purposes, including (1) reversing the elimination of a net capital loss made in computing the

amount shown as taxable income on lines 8(a) or 8(b); (2) reversing the deduction of a capital loss

carryforward reflected in computing capital gain or loss as shown in lines 8(a) or 8(b), as such capital loss

carry forward is not permitted for Massachusetts purposes; and (3) reversing the reclassification and

offsetting of § 1231 gains against capital losses to the extent such adjustments are reflected in

computing taxable income as shown in column (a) or (b). See 830 CMR 63.32B.2 (8) and Directive 10-05.

Income from Sources other than the Unitary Business:

Columns (d) and (e) (note: not applicable in the case of an affiliated group election)

Columns (d) and (e) only apply in cases in which the combined group has not made and is therefore not

subject to an affiliated group election. In these cases, a member of a combined group (including a non-

taxable member of such group) may have income or loss that derives from sources other than the

combined group’s unitary business. Columns (d) and (e) of Schedule U-M report this income of the

group member, which can include allocable income that is not taxable in Massachusetts, to be reported

in column (d), and allocable or apportionable income that is taxable in Massachusetts, to be reported in

column (e). A member with a taxable year that is different than the combined group’s taxable year

should also use column (d) to exclude any income that it has from sources other than the combined

group’s unitary business that is to be reported on the member’s separate Massachusetts tax return (i.e.,

Instructions For Schedule U-M - Member'S Income And Expenses - 2012 Page 5