Entering a corporation as a controlled group (1120)

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If an 1120 client qualifies as a member of a controlled group, use the following procedure to assign the corporation its share of the group's taxable income bracket amounts, credit, exemption, and limitation items. Also, use this procedure to prepare Schedule O - Consent Plan and Apportionment Schedule for a Controlled Group.

  1. Open the desired client (File > Open Client). Click the General folder in the folders block and then click the 1120 tab.
  2. In the 1120 Information section, enter X in the Part of controlled group field to indicate that this client qualifies.
  3. Click the Controlled Groups folder and then click the Ctrl tab. Note that the information you enter in the Controlled Group Member 1 section of Screen Ctrl transfers to the current client's return as well as to Schedule O - Consent Plan and Apportionment Schedule for a Controlled Group. Data entered in Screen Ctrl-2 transfers only to Schedule O - Consent Plan and Apportionment Schedule for a Controlled Group in the current client.
  4. UltraTax CS automatically completes most of the general information in the Controlled Group Member 1 section based on data entered in Screen 1120. If desired, edit the general information in this screen.
  5. Choose one of the following methods of allocation:
    • Allocation based on ratio to total group taxable income - To allocate the current client's share of regular tax bracket amounts, credit, exemption, and limitation items based on the taxable income ratio, enter the appropriate amounts in each Member's total taxable income field in Screen Ctrl-2. UltraTax CS automatically calculates the amount of each regular tax bracket, credit, exemption, and limitation item that is allocable to each member, and transfers these amounts to Schedule O - Consent Plan and Apportionment Schedule for a Controlled Group. If you choose this method, UltraTax CS automatically uses the taxable income amount calculated on Page 1 of the return. However, you can force UltraTax CS to use a different taxable income amount by entering an amount in the Current client taxable income (Force) field in Screen Ctrl.
    • Allocation based on number of group members - To allocate the share of regular tax bracket amounts, credit, exemption, and limitation items evenly among the members, mark the Allocate all amounts equally based on the number of members in the group field in Screen Ctrl. UltraTax CS then automatically calculates the amount of each regular tax bracket, credit, exemption, and limitation item that is allocable to each member.
    • Special allocation method - To specially allocate a regular tax bracket, credit, exemption, or limitation item in some other manner, you must manually calculate the allocation and enter the amount in the Special Allocations section for each controlled group member. Note, however, that you do not need to enter amounts for the last member. UltraTax CS automatically calculates the last member's amount by taking the difference between the total amount available for the group in each category and the total amount allocated to all other members.

If you chose the special allocation method, see Entering a corporation as a controlled group - Special Allocation Method.

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