Consolidate partnership returns
You'll need to set the entity type as a Division for each entity you want to consolidate, and include an Elimination partnership in the divisional consolidation. Enter the detail with Tax Combination Codes (TCC/MCC) for all divisions. Otherwise, the detail won’t be consolidated, and you may see duplicate descriptions. The system consolidates the detail by TCCs for all divisions and brings the detail information into the Organizer on the divisional rollup during consolidation.
The following steps are required in creating the federal consolidated return:
- Prepare the division returns for each entity.
- Prepare the elimination return.
- Prepare the divisional consolidation return.
- Consolidate the divisional consolidation return.
- Review and finalize forms.
- Print the consolidated return.
Points to remember
- Enter the general information (name, address, FEIN, and so forth) that appears on the consolidated return.
- Correctly enter the list of entities to consolidate.
- Enter a consistent level of detail in all returns.
We’ll go through all of these items and provide tips for creating a successful consolidation.
What's consolidated?
The system consolidates the following forms in the divisional consolidation return if you enter information on these forms in any of the divisional returns.
Detail information carrying to divisional consolidations
Detail with TCC/MCC codes
Enter the detail with Tax Combination Codes (TCC/MCC) for all divisions. If you don't do this, you'll not consolidate the detail and you may get duplicate descriptions. You can't override these detail fields in the divisional consolidation return. The system will remove overrides after re-consolidation, even if the fields are locked. The system consolidates the detail by TCC/MCC codes for all divisions and bring detail information into the Organizer during consolidation for the following forms:
- Form 1065, Pages 1 and 2
- Form 1065, Page 5, Schedule K
- Form 1065, Page 6, Schedules L, M-1 and M-2
- Schedule M-3: Net Income (Loss) Reconciliation for Certain Partnerships, Part II, Lines 22 and 25, and Part III, Lines 29 and 30
- Form 8916-A: Supplemental Attachments to Schedule M-3, Part I, Line 6, Part II, Line 5, and Part III, Line 4.
Detail without TCC/MCC codes
You can't use overrides on these detail fields in the divisional consolidation return. The system will remove overrides after re-consolidation, even if the fields are locked. The system also transfers detail to the divisional consolidation return for the following:
- Schedule M-3: Net Income (Loss) Reconciliation for Certain Partnerships, Part II, Lines 1 through 10, and 21f.
- Form 8916-A: Supplemental Attachments to Schedule M-3, Part I, Line 7.
- Schedule D: Capital Gains and Losses
- Form 4797: Sales of Business Property
- Form 8825: Rental Real Estate Income and Expenses of a Partnership or an S Corporation
- Form 8949: Sales and Other Disposition of Capital Assets.
Detail information not carrying to divisional consolidation returns
Information from the following forms rolls up to the divisional consolidation return in total. The system doesn’t transfer detail to the divisional consolidation return.
- Form 3468: Investment Credit
- Form 4562: Depreciation and Amortization
- Form 5884: Work Opportunity Credit
- Form 8820: Orphan Drug Credit
- Form 8826: Disabled Access Credit
- Form 8834: Qualified Electric Vehicle Credit.
