Entering required information for expanded affiliated groups (1120)

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If the C Corporation is a member of an expanded affiliated group, complete the following steps to determine the DPAD for the group.

  1. For each taxpayer who is a member, enter the member's DAPD information in the Expanded Affiliated Group Member section. UltraTax/1120 will calculate the Expanded Affiliated Group Member QPAI Worksheet.

    Note: If the taxpayer has pass-through entity amounts, the pass-through amounts should also be entered appropriately.

  2. Select the reporting member for the EAG to complete Form 8903 and allocate the deduction for the entire group.
  3. For each taxpayer, complete the Member of an expanded affiliated group (EAG) field in Screen 8903. If the taxpayer is the reporting member, enter 2 in this field. All non-reporting members should enter 1 in this field.

    Note: UltraTax/1120 will disable certain fields in the Form 8903 - Domestic Production Activities Deduction section based on the number entered in this field. This is done to help you in your data entry for the type of member.

  4. If the taxpayer is the reporting member and 2 is entered in the Member of an expanded affiliated group (EAG) field in Screen 8903, enter the following information in the statement dialog attached to the Expanded affiliated group member information for allocation of deduction field in Screen 8903 for each member of the EAG: name, EIN, qualified production activities income, taxable income, and allocable Form W-2 wages. UltraTax/1120 uses this information to complete the Expanded Affiliated Group Member QPAI Worksheet.

    UltraTax/1120 uses the calculations on the Expanded Affiliated Group Member QPAI Worksheet to complete Form 8903, lines 10 through 16 and lines 18 through 22 for the reporting member.

  5. If the taxpayer is the reporting member and 2 is entered in the Member of an expanded affiliated group (EAG) field in Screen 8903, UltraTax/1120 automatically completes line 24 of the reporting member's Form 8903 based on the allocation calculated on the Expanded Affiliated Group DPAD Allocation Worksheet. No entry is required in the Expanded affiliated group allocation field in Screen 8903.
  6. If the taxpayer is a non-reporting member and 1 is entered in the Member of an expanded affiliated group (EAG) field in Screen 8903, enter the member's allocated DPAD from the EAG as a positive amount in the Expanded affiliated group allocation field in Screen 8903. The amount of the member's deduction can be obtained from the Expanded Affiliated Group DPAD Allocation Worksheet calculated in the reporting member.

Related topic: UltraTax/1120 procedures

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