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Consolidations

About federal consolidations

During the federal consolidation process, information for the parent company and each subsidiary or division included in the consolidated tax return's combined in a consolidation binder.
This process is accomplished by performing these steps:
  1. Consolidate entities and binders
    1. For state purposes you may need a new binder: If the state return members are different from your federal, if you don't need to process a federal consolidation, if you want to maintain separate data files for state purposes, or if entities in your combined group for which you're not using an existing federal return binder.
  5. Print the consolidated return, and if applicable, any state combined/consolidated returns

Federal consolidation capabilities

  • Performs complex multi-tier consolidations
  • Combines data from parent, subsidiaries, and divisions
  • Computes eliminations and adjustments
  • Prepares Tax Bracket Allocation Schedule and Controlled Group Election Statement
  • Offers stacked and cross-tied whitepaper for consolidated federal Form 1120
  • Provides look-through print options for sub-consolidated detail
  • Provides summary consolidated return schedules in 8-column format for key federal forms and schedules including:
    • Form 1120
    • Forms 4562, 4626, 3468, 3800, 4797, 5884, 6478, 6765, and Schedule D
  • Computes limitations for NOL, contributions, capital loss carryovers, various credits, and SRLY/non-SRLY NOL deduction

Types of consolidations

The system offers these types of consolidations:
  • Single-tier consolidation
     - All entities (parent, subsidiaries, and eliminations) are combined into 1 consolidation binder.
    Single-tier consolidation
    Top Consolidation box with 4 boxes below it naming Parent, Sub 1, Sub 2, and Elimination on the same level or single-tier.
  • Multi-tier consolidation - A divisional / subsidiary consolidation's the combining of financial information for specific levels of divisions and subsidiaries. Because these lower level consolidations will be combined into a Top Consolidation, these consolidations are referred to as multi-tier consolidations. The divisional/subsidiary consolidation binders include individual binders for each subsidiary, a binder for the parent entity, subconsolidation binders for each group of divisions, an elimination binder for each subconsolidation group, and the Top Consolidation binder.
    Multi-tier consolidation
    Top Consolidation box with 4 boxes underneath and then another 4 boxes under those showing multi-tier consolidation.

This article applies to:

  • Product: ONESOURCE Income Tax
  • Return type: 1120 Corporation
  • Subject: Consolidations

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