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

1. Add California to the parent client and all 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. Apportionment data entry is accessed through View > Apportionment.

2. 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 California purposes only. UltraTax CS generates the combined group return from this S Corporation consolidated client.
3. Select the appropriate members to be included in the California 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 Client Properties dialog.
4. Add California to the new S Corporation consolidated client.

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

   If California 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.

5. Review all California 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 S Cooperation consolidated client. For a list of categories and related input screens, see Categories and related California input screens.

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

6. 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.
7. To change amounts entered in the California parent 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.
8. Print and review the California S Corporation consolidated tax return.

Example of when a California group is different than a federal S Corporation consolidated group.

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