Income Taxes: Consolidated Returns and Combined Reporting (Portfolio 1130)
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The Portfolio, Income Taxes: Consolidated Returns and Combined Reporting, compares state combined reports and state consolidated returns in detail and discusses the mechanics and implications of filing combined reports.
Description
Tax Management Portfolio Income Taxes: Consolidated Returns and Combined Reporting, No. 1130, compares state combined reports and state consolidated returns in detail and discusses the mechanics and implications of filing combined reports and the different types of state consolidated returns. At the state level, members of a multi-corporate group may, depending on the circumstances and the laws of the particular state, determine their state taxable income using the separate return, combined report, or consolidated return methods. Furthermore, this may be so regardless of whether the group files a federal consolidated return or federal separate returns.
In addition, the Portfolio addresses the state tax implications of federal consolidated returns and the federal consolidated return regulations. Issues discussed include those arising when a group files a consolidated federal income tax return, but one or more members file in a taxing state using the separate return method. The Portfolio also discusses issues that may arise in filing state combined reports and contrasts how these issues have been handled at the state level with the treatment of these issues under the federal consolidated return regulations.
For information on related Code sections, go to §1501, §1502, §1503, §1504, §1505, §1551, §1552, §1561, §1563
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Table of Contents
1130.01. Introduction
1130.02. Strategic Analysis
1130.03. Federal Issues
A. What Is the Business to Be Taxed?
B. Does the Unitary Business to be Taxed Include Corporations Lacking Tax Presence?
1. California – Joyce v. Finnigan
2. Everywhere Else
1130.04 How is income determined?
1130.05 Types of Returns
A. Methods of Computing Taxable Income
1. Federal Income Tax Returns
a. Separate Return Method
b. Consolidated Return Method
2. State Income Tax Returns
a. Separate Return Method
b. Combined Reporting Method
1130.06. Multistate Tax Commission 2006 Proposed Model Statute for Combined Reporting
A. Definitions
1. Taxpayer
2. Person
3. Partnerships
a. New York City
b. New York State
c. North Carolina
d. Illinois
e. Alabama
f. Florida
g. Georgia (Individual Partners)
h. Wisconsin
i. New Jersey
j. Massachusetts
4. Corporations
5. Unitary Business
6. Tax Havens
B. Other Considerations
1. 2018 Developments Restricting
Department of Revenue Adjustments
C. Determination of Taxable Income or Loss
D. Water’s Edge Election
1130.07. Multistate Tax Commission 2018 Draft Proposed Model Statute for Combined Reporting
1130.08. Apportionment
A. General Apportionment
B. California Apportionment Example
1130.09. Consolidated Return Method
A. Patterns of Filing State Returns
1130.10. Group Filing Considerations
A. Common Parent as Agent for Group
1. Combined Reports
2. Consolidated Returns
B. Taxable Years of Members and Income to Be Included in Return
1. Separate Returns
2. Combined Reports
a. General Rule
C. Apportioning Income Between Taxable Years
D. Due Dates of Returns for Members
Entering or Leaving a Group
E. Intercompany Transactions
1. Separate State Returns
2. Combined Reports or Consolidated State Returns
3. Inventories
4. Fixed Assets and Capitalized Items
5. Water’s-Edge Elections
F. Nondeferred Transactions
1. Separate State Returns
2. Combined Reports and State
Consolidated Returns
G. Dividends
1. Separate State Returns
2. Combined Reports and State
Consolidated Returns
Working Papers