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Subpart F

Hovering Deficit Offset Calculation and Rollover for Tax Years 2012 and Later

For tax years 2012 and later, we added a new Hovering Deficit screen in legal entity binders (subsidiaries, parents, divisional consolidations, and corporate single entities) with an International Filing Type of
Foreign Entity
.
When you enter the remaining balance of any Post-86 hovering deficits (as of the start of the year), ONESOURCE Income Tax International determines the amount that can be offset by current year earnings and the amount of related taxes that should be added to the tax pool. Any deficit in the earnings accumulated after the hovering deficit date (identified by the tax year layer entered in the Post-86 Earnings and Profits screen) prior to the current year, will offset the amount of current year earnings after distribution available for hovering deficit utilization.
During rollover from tax years 2012 to 2013 and later, hovering deficit balances are updated and the prior year's hovering deficit offset (from the E&P Pools Report) and tax pool increment (from the Post'86 Income Taxes Pool Report) are added to the Adjustment tabs of the Post-86 E&P and Tax Pool screens. The adjustments are identified as related to the prior year binder's Tax Year Layer when you select the
Adjustment Made in Current Year
 and
Hovering Deficit Adjustment
boxes.

Hovering Deficits

The Hovering Deficits screen (located by navigating to
Foreign Entity > Other Adjustment
 folder) is used to record any unutilized (remaining) hovering deficits available to offset current year earnings and the related tax amount that has not yet been recognized. The system automatically calculates any current year earnings offset and any addition to the tax pool and updates the hovering deficit balances in this screen during rollover to the next year.

Entering Hovering Deficit Information

  1. On the TAS navigation tree, select
    Foreign Entity > Other Adjustments > Hovering Deficits
    .
  2. Enter the transaction date for the Post-86 pool hovering deficit.
  3. Select a
    Basket
     from the list.
  4. Enter the remaining (unutilized) Hovering Deficit Amount in the entity's functional currency.
  5. Enter
    Related Taxes in U.S. Dollars
    .
  6. Enter a
    Description
     for this deficit.
  7. Click
    Save
    , then
    Close
    .

This article applies to:

  • Product: ONESOURCE Income Tax
  • Subject: Roll forward / rollover
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