Form 355 - Massachusetts Corporation Excise Return

Line by Line Instructions

Schedule E-2. Loss

Line 3

Massachusetts Alternate Apportionment Regula-

tion, 830 CMR 63.42.1.

These are special instructions for corporations that

Carryover Deduction

filed Form 355U in 2009. A corporation that filed as

For further information about corporations that

a member of a combined group for a taxable year

hold partnership interests and the appropriate

beginning on or after January 1, 2009 may have a

method to use to apportion partnership income,

Massachusetts allows two different loss carryover

net operating loss determined on a post-appor-

see Regulation 830 CMR 63.38.1 sec. 4(d) and 12.

deductions, a deduction available only to corpora-

tionment basis. Such corporations (only) enter

tions during the first five years of the corporation's

Corporations engaged in substantial manufactur-

that post-apportionment NOL on item 3(e), leaving

existence and a deduction generally available to

ing (section 38 manufacturers) are required to ap-

the amounts on 3(a) through 3(d) blank.

all business corporations. A corporation may take

portion their net income based on sales factor only.

only one of these deductions in a taxable year. If

Line 4

Corporations other than section 38 manufacturers

the corporation qualifies to take either deduction,

or mutual fund service corporations are required to

All corporations leave the amounts on lines 4(a)

the choice between the deductions is left to the

apportion their net income as follows: sales factor

through 4(d) blank. Enter the corporation’s post-

corporation's discretion. Note that a corporation

equals 50%, property factor equals 25%, payroll

apportionment on line 4(e).

electing the “new corporation” NOL must reduce

factor equals 25%.

its net operating loss for amounts carried back for

Line 5

To determine if a corporation qualifies as a section

purposes of determining the federal net operating

All corporations leave the amounts on lines 5(a)

38 manufacturer or mutual fund service corpora-

loss deduction. See 830 CMR 63.30.2(3).

through 5(d) blank. Enter the corporation’s post-

tion, see instructions for the registration section:

apportionment on line 5(e).

Lines 1 through 5

line 2 of Form 355 or 355S.

For each of lines 1 through 5, enter the appropri-

Line 6

If a corporation is a section 38 manufacturer or

ate amounts for each of the items listed if the (a)

mutual fund service corporation, fill in the applica-

Combine the amounts from all row (g) items,

the corporation sustained a Massachusetts net

ble oval. If a corporation is not a section 38 manu-

lines1 through 5.

operating loss in the relevant year and (b) the cor-

facturer or a mutual fund service corporation, fill in

poration was taxable on its income in Massachu-

Line 7

the oval for “Other.”

setts. If the corporation was organized after the

If the amount on Schedule E, line 25 is greater

Mutual fund service corporations must complete

year in question, was not taxable in Massachu-

than “0,” enter that amount. Otherwise, enter “0.”

a Schedule F based on mutual fund sales and a

setts or did not sustain a Massachusetts net oper-

separate Schedule F based on non-mutual fund

ating loss, leave all fields for that year blank.

Line 8

sales, if any. For further information on apportion-

Enter the smaller of line 6 or line 7. Also enter this

Row a

ment for mutual fund service corporations, see

amount on Schedule E, line 26.

Enter the amount of any pre-apportionment net

Regulation 830 CMR 63.38.7.

operating loss shown on the corporation’s Mass-

Corporations must complete all lines, regardless

Schedule F. Income

achusetts return.

of apportionment method used. Make certain that

Row b

complete information is entered for all apportion-

Apportionment

ment factors. A return which is incomplete will be

Enter the amount of any pre-apportionment net

considered insufficient.

operating loss used in a prior year.

Mutual fund service corporations should complete

Row c

a Schedule F for income from mutual fund sales if

Line Instructions

Subtract the amount used from the original loss.

they made mutual fund sales to RIC’s with share-

holders domiciled outside of Massachusetts.

Row d

1. Property Factor

Schedule F should be completed by all other corpo-

Enter the apportionment factor shown on the cor-

Line 1a

rations (including mutual fund service corporations

poration’s Massachusetts corporate excise tax re-

reporting non-mutual fund sales) which have in-

For tax purposes, average value is based on orig-

turn for the loss year. If the corporation was not

come from business activities which is taxable both

inal cost and is determined by averaging the prop-

taxable in any other state, enter 1.000000.

in Massachusetts and in any other state. For pur-

erty values at the beginning and end of the taxable

Row e

poses of this requirement, “taxable” has the mean-

year. If substantial changes occur during the tax-

ing set forth in the Apportionment of Income

able year, the Commissioner may require monthly

Multiply row (c) by row (d).

Regulation, 830 CMR 63.38.1 sec. 5(b). This stan-

averaging to properly reflect the average value of

Row f

dard is not satisfied merely because the taxpayer

the property. For purposes of the property factor, a

Enter the amount if the corporation used a post-

is incorporated in such a state or files a return in

taxpayer may elect to use any reasonable method

apportionment net operating loss in a prior year.

such a state that relates to capital stock tax or

for attributing its mobile property to Massachu-

Caution, prior to January 1, 2010 only corpora-

franchise tax for the privilege of doing business.

setts. The election is made by filing a return that

tions subject to combined reporting and filing

employs the chosen method for the first tax year

If the corporation is requesting alternate appor-

form 355U deducted a net operating loss on a

ending on or after August 11, 1995, in which the

tionment under M.G.L. Ch 63, sec. 42, answer

post-apportionment basis.

taxpayer owns or rents mobile property and appor-

yes in line 7 of Form 355 and enclose Form AA-1.

tions income to Massachusetts. The taxpayer must

Row g

You must still complete and file Schedule F. A re-

make available a statement describing the method

Subtract row (f) from row (e).

fund will be issued if alternative apportionment is

chosen and must use the same method consis-

granted by the Commissioner. For further infor-

tently from year to year. For further information, in-

mation on alternative apportionment see the

Form 355 - Massachusetts Corporation Excise Return - 2012 Page 12

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