Foreign Entity Computes Process in Income Tax
The system uses international computes for foreign entities to compute earnings and profits, Look Through Transactions, Subpart F and investment in U.S. property inclusions, and compute deemed paid credits on distribution amounts. You can select these international computes for foreign entities at the separate company level or from the Top Consolidation binder.
Binder Properties - Members Tab
The
Members
tab on the Binder Properties
screen only appears in a consolidation, top consolidation or divisional consolidation binder.You can make selections based on the type of entity:
- Top Consolidation- Select each Subsidiary, Divisional Consolidation, and Parent that you want to be a member.
- Divisional Consolidation- Select each division that you want to be a member. Only divisions can be members of Divisional Consolidations.
- Prior to tax year 2009, only divisions could be members of Divisional Consolidations. In 2009 or later foreign divisions, parents, subsidiaries, and other divisional consolidations can be members of a foreign divisional consolidation.
Selecting Members of a Top Consolidation (Top Con)
- Select a top consolidation binder.
- Select thePropertiesicon.
- Select theMemberstab.
- ClickAddto add the Eliminations, Parent and FTC domestic binders to this screen.
- After adding the domestic binders, click theInternational Memberstab to add foreign binders.
note
Subconsolidation binders are not recognized by the international software. If the Domestic Members tab contains a subconsolidation, add the individual domestic binders that are members of the subconsolidation to the International Members screen.
- ClickAddInternational Membersto select the foreign binders.
- Select aWorkarea.
- Select theentity name, type, binderandworkareafrom the lists to select members.
- ClickSave.
- Enter theOwnership Percentage.
- The international ownership percentage entered in a tax year 2015 (or later) Top Consolidation binder’s InternationalMembers screen and the effective ownership calculated by the system allows up to six decimal places (for example, 12.345678%). For tax years 2014 and earlier, ownership percentages are limited to two decimal places.
- ClickSave.
note
All foreign binders must be 100% owned for successful computes. You must create an Eliminations entity and elimination binder before beginning this process.
