Preparing Colorado returns when the state and federal groups are different and there are no members with at-risk or passive activities

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Use this procedure to ensure the correct preparation of Colorado consolidated and combined income tax returns if the members of the Colorado unitary business group are not the same as those included in the federal consolidated group and the federal group does not contain members with at-risk or passive activities.

  1. Add Colorado to the parent client and the applicable subsidiary clients. Complete all data entry for these member clients. Each member's state return should be complete and correct before proceeding to the next step.

    Note: Apportionment data entry must be completed for each member client, even if the client is 100 percent in-state. The same apportionment method must be used by the parent client and the applicable subsidiary clients. Apportionment data entry is accessed through View > Apportionment.

  2. Create a new eliminations client for Colorado purposes and add Colorado to the client. Complete this client before proceeding to the next step. If an eliminations client was part of the federal consolidated group, a new state eliminations client is needed because the eliminations client used in the federal consolidated group may include eliminations involving members that are not to be included in the Colorado consolidated or combined group.

    Note: Including an eliminations client as part of a consolidated group is optional.

  3. Clone the existing federal consolidated client. Open the federal consolidated client, choose File > Save As, enter a new client ID for the client, and click the Save button. This new client has the same EIN and name as the federal consolidated client, but is used for Colorado purposes only. This is the consolidated client from which UltraTax CS generates the consolidated or combined Form 112.
  4. Select the appropriate members to be included in the Colorado consolidated or combined group. Choose File > Client Properties and click the Advanced Properties button. In the Group tab, remove or add subsidiary clients as necessary. If applicable, remove the current eliminations client that was used by the federal client and then add the eliminations client created in step 2. Click OK to close the Advanced Properties dialog. Click OK again to close the Client Properties dialog.
  5. Add Colorado to the new consolidated client.

    Note: When adding Colorado to a consolidated federal client, the state automatically defaults to being a consolidated return.

    If a state is added as a C Corporation to a federal consolidated group, the consolidated functionality does not take place. The amounts from each member are not consolidated or combined, and the consolidated or combined reports are not available.

  6. Review all Colorado consolidated or combined client input screens and complete any necessary remaining data entry. For each category not marked in the File > Client Properties > Advanced Properties > Options dialog, enter the necessary data in the applicable input screens.

    Note: If a category is not marked, enter the data on the applicable input screens in the consolidated/combined client. For a list of categories and related input screens, see Categories and related Colorado input screens.

    Any changes made to the File > Client Properties > Advanced Properties > Options dialog affect both the federal and state return.

  7. Click the Consol/Combined folder in the Colorado folders block. Complete the necessary information in Screens COAffil, COCC, and COCAdj.
  8. To make manual adjustments in other areas of the return, click the Group View button or press F7 in the input screen field you want to adjust, and then enter the adjustment amount in the Group View dialog.
  9. To change amounts entered in the Colorado parent, eliminations, or subsidiary clients, go back to the original source of data entry. For instance, if you made a mistake when you entered the apportionment of the first subsidiary, close the consolidated client and reopen the first subsidiary. Choose View > Apportionment for that client and correct the data. Close the subsidiary client and reopen the consolidated client. The correct amount is now a part of the combined group return.
  10. Print and review the Colorado consolidated or combined tax return.

Example of when a Colorado group is different from a federal consolidated group and the federal group does not contain members with at-risk or passive activities.

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