1120C consolidated returns overview

Alerts and notices

General principles

  • A consolidated group is made up of a parent member, subsidiary members, and an optional eliminations member. Only C Corporations are eligible members of an 1120C consolidated group. Separate returns are required for each entity including the eliminations member.
  • For example, if a consolidated group were comprised of a parent and one subsidiary, you would create a total of either three or four returns in UltraTax CS, depending on whether or not you want to have an eliminations member. If you do not want to have an eliminations member, set up a parent, a subsidiary, and a consolidated return. If you do want to have an eliminations member, set up a parent, a subsidiary, an eliminations, and a consolidated return.
  • The parent client is the first company listed in the consolidation reports. Some pieces of information entered in the parent return, such as address, date of incorporation, method of accounting, product or service, etc. are used to complete parts of the consolidated Form 1120.
  • The eliminations return is used to enter inter-company transactions. Enter as positive values those amounts that are to be added, and enter as negative values those amounts that are to be subtracted. The eliminations return information is listed under the Eliminations column of the consolidation reports. Note that including an eliminations member as part of a consolidated group is optional.
  • The subsidiary returns are any 1120 C Corporations being processed in UltraTax CS for the current year. These returns do not need to be prepared differently than any other return; however, consistency among the group members' separate returns ensures a successful consolidated group return. Any overrides entered in one of the separate returns appear in the Adjustments column of the consolidated group reports. In certain cases, form overrides cause the detail not to match the information in the consolidated group reports.
  • Most data from the parent, eliminations, and subsidiary returns is combined and appears on the input screens of the consolidated return. A small amount of data needs to be entered in the consolidated return.
  • UltraTax CS makes automatic adjustments for the contributions deduction, net operating loss deduction, net capital loss deduction, dividends received deduction, at-risk and passive loss limitations, Section 1231 losses, and SRLY limitations. Adjustments not made automatically by UltraTax CS need to be entered manually in the consolidated return. To make manual adjustments, click the Group View Group View button button or press F7 in the input screen field you want to adjust, and then enter the adjustment amount in the Group View dialog. Manual adjustments print in the Adjustments column of the consolidation reports.
  • Returns filing Form 1120-C, 1120-F, 1120-H, 1120-IC-DISC, 1120-PC, 1120-POL, 1120-REIT, or 1120-SF cannot be members of 1120C consolidated returns.
  • For information on entering state apportionment data for 1120 consolidated returns, see Apportionment Information window.

When backing up or restoring a consolidated return, also back up or restore all member returns as well.