Preparing Missouri S Corporation returns when the state and federal groups are different

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Use this procedure to ensure the correct preparation of Missouri S Corporation consolidated income tax returns if the members of the Missouri group are not the same as those included in the federal consolidated group.

  1. Add Missouri 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 applicable subsidiaries. Apportionment data entry is accessed through View > Apportionment.

  2. Create a new eliminations client for Missouri purposes and add Missouri to the client. Complete this client before proceeding to the next step. If an eliminations client was part of the federal S Corporation 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 Missouri S Corporation consolidated group.

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

  3. Clone the existing federal S Corporation 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 Missouri purposes only. UltraTax CS generates the Consolidated Form MO-1120S, S Corporation Income/Franchise Tax Return.
  4. Select the appropriate members to be included in the Missouri S Corporation consolidated 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 New Client or Client Properties dialog.
  5. Add Missouri to the new S Corporation consolidated client.

    Note: When adding Missouri to an S Corporation consolidated federal client, the state automatically defaults to being a consolidated S return.

    If the state is added as an S Corporation to a federal consolidated group, the consolidated functionality does not take place. The amounts from each member are not consolidated.

  6. Review all Missouri consolidated 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 S Corporation consolidated client. For a list of categories and related input screens, see Categories and related Missouri input screens.

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

  7. To make manual adjustments in other areas of the return, click the Group View button or press F7 on the input screen field you want to adjust, and then enter the adjustment amount in the Group View dialog.
  8. To change amounts entered in the Missouri 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 consolidated group return.
  9. Print and review the Missouri S Corporation consolidated tax return.

Example of when a Missouri group is different from a federal consolidated group.

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