Preparing an 1120 consolidated income tax return

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Use this procedure to ensure the correct preparation of a new or existing consolidated income tax return.

  • You may need to adjust the data for your member returns before preparing the consolidated income tax return.
  • When backing up or restoring a consolidated return, also back up or restore all member returns as well.

Note: The tax accrual options are not available for consolidated returns.

  1. Proforma or add a new return to UltraTax CS with the Consolidated C entity type. See Adding a C Corporation consolidated return if you are preparing a new C Corporation consolidated return. In addition, proforma or add a new parent return, subsidiary return, and eliminations return for each member of the consolidated group.

    Notes

    • Including an eliminations return as part of the consolidated group is optional.
    • If processing a consolidated / combined return for Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York / New York City, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, or Wisconsin, see State consolidated / combined return processing.
  2. If Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, New Hampshire, Nebraska, New Mexico, New York / New York City, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, or Wisconsin is or will be attached to the consolidated return, the state return type chosen in File > Client Properties > [state] tab must be consolidated / combined in order to print state consolidated / combined reports for these states. If you choose the C Corporation state return type rather than consolidated / combined, UltraTax CS does not print consolidated / combined reports or forms.

    Note: Changing the state return type requires that the state be deleted and reattached with the proper state return type, resulting in the loss of all state data. Therefore, you need to make the proper selection before data entry begins.

  3. Retrieve general ledger balances from your CS Professional Suite accounting application that integrates with UltraTax CS for each member return.

    Note: If you use a CS Professional Suite accounting application to retrieve general ledger balances for a consolidated return in UltraTax/1120 Consolidated, you need to set up individual clients in your accounting application for the parent company, the eliminations company, and each subsidiary company. A client that is departmentalized in the accounting application does not properly interface with the consolidated return in UltraTax/1120 Consolidated.

  4. Complete the remaining data entry for all members. It is important to keep the level of detail consistent across all members of the consolidated group. Also, each member's return should be complete and correct before proceeding to the next step.
  5. Proforma or add a new return to UltraTax CS with the Consolidated C entity type. See Adding a C Corporation consolidated return if you are preparing a new C Corporation consolidated return.
  6. Review all consolidated input screens and complete any necessary remaining data entry.
    • For each category that was not marked in the File > Client Properties > Advanced Properties > Options dialog, enter the necessary data in the applicable input screens.
    • Click the Consolidated folder. Click the Affil tab and complete the information on this input screen for Form 851, Affiliations Schedule. Note that UltraTax CS creates one of these input screens for each member of the consolidated group.
  7. To file Form 1122, Authorization and Consent of a Subsidiary Corporation to be Included in a Consolidated Income Tax Return for a particular member of the consolidated group, mark the Filing Form 1122 field in Screen Affil for that member.
  8. To make manual adjustments in other areas of the return, open the Group View dialog or press F7 for the field you want to adjust, then enter the adjustment amount.
  9. To change amounts entered in the parent, eliminations, or subsidiary returns, go back to the original source of data entry. For instance, if you made a mistake in asset data entry of the first subsidiary, close the consolidated return and reopen the first subsidiary. Go into asset data entry for that return and correct the data. Close the subsidiary return and reopen the consolidated group. The correct number should now be a part of the consolidated group return.
  10. Print and review the consolidated tax return.

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