Consolidating partnerships with corporations
The unextended due date of the return of a domestic corporation, Form 1120, U. Corporation Income Tax Return, generally is the 15th day of the third month following the close of the corporation's tax year.
The consolidation method is a type of investment accounting used for consolidating the financial statements of majority ownership investments.At the consolidated level, an elimination adjustment must be added so that the consolidated statement is not overstated by the amount of equity held by the parent.The elimination adjustment is made with the intent of offsetting the intercompany transaction, such that the values are not double counted at the consolidated level.The equity method records the investment as an asset, more specifically as an investment in associates or affiliates, and the investor accrues a proportionate share of the investee’s income. This has been a guide to the consolidation method of accounting for investments.
IRC §1501 allows, but does not require, an affiliated group of corporations to file a consolidated income tax return for the group.
The IRS announced that it will permit an affiliated group of corporations that did not file the required Form 1122 for all of its subsidiaries to be treated as if its subsidiaries had filed Form 1122.