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Consolidation

Prepare member clients for a Form 1120 consolidated return

Follow these guidelines to adjust member data to prepare a Form 1120 consolidated return.

Mid-quarter convention

If the consolidated client is subject to the mid-quarter convention for depreciation, and asset information is entered in the asset module through the Asset tab, do the following for each member.
  1. Select the
    Asset
     tab,
    Setup
    , then
    Treatments
    .
  2. Select the treatment.
  3. Select
    Options
    .
  4. Select
    Force application
     in the Mid-quarter application for current-year acquisitions section.

Schedule M-3

If the total assets for the consolidated return equal $10 million or more, you'll need to file Schedule M-3. Complete the M3-2 and M3-3 screens in the Balance folder for each member. You only need to complete the M3 screen in the consolidated return.
If total assets for the consolidated return equal less than $50 million, the corporation can choose to file Schedule M-1 in lieu of Schedule M-3. To do so, enter the data in the Mc screen in the Balance Sheet folder and enter
1
 in the
Complete Schedule M-1 in lieu of Schedule M-3, Parts II and III
 field on the M3 screen in the C Corporation consolidated return and all member returns.

Section 179 deduction

The section 179 deduction across all members in total shouldn't exceed $500,000.
If the section 179 expense calculated for the consolidated return is different than the sum of the members' section 179 expense due to the business income limitation, enter an amount in the
Section 179: Business income limitation (Force)
 field in the OthAsset screen in the General folder for each member so that the calculated section 179 deduction for all group members together equals that of the consolidated return.
If the section 179 deduction is limited for the consolidated return due to the cost of section 179 property placed in service, enter an amount in the
Section 179: Total cost of Section 179 property placed in service this year (Force)
 field in the OthAsset screen for each member so that the calculated section 179 deduction for all group members together equals that of the consolidated return.

State return processing

State information entered in any member client isn't available to the consolidated return. To enter state information related to the consolidated return, attach the state to the consolidated return.
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