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This article applies to:

  • Product: GoSystem Tax RS
  • Return type: 1120 Corporation
  • Subject: insurance

Mixed group state consolidation for insurance returns

There are 2 different structures of setting up a mixed group state consolidation return. Multi-tier or single-tier (flat) consolidation structures.

Multi-tier mixed group state consolidation structures

Similar to the federal mixed group consolidation, this structure includes a topmost 1120 subgroup, a topmost 1120-PC subgroup, and a topmost 1120-L subgroup.
The 1120 topmost subgroup is consolidated with the 1120-PC onto a nonlife top con (or subcon if there is an 1120-L subgroup in the consolidation). Then, the nonlife subgroup is consolidated with the topmost 1120-L subgroup into a life-nonlife consolidation. The following diagram shows this structure.
  • 1120/1120-PC/1120-L Life-Nonlife
    • Life-Nonlife Eliminations
      • Nonlife Elimination
    • 1120/1120-PC Nonlife
      • 1120 Topmost Subgroup
        • 1120 Parent
        • 1120 Subsidiary
        • 1120 Subgroup Eliminations
      • 1120-PC Topmost Subgroup
        • 1120-PC Parent
        • 1120-PC Subsidiary
        • 1120-PC Subgroup Eliminations
    • 1120-L Topmost Subgroup
      • 1120-L Parent
      • 1120-L Subsidiary
      • 1120-L Subgroup Eliminations

Single-Tier or Flat mixed group state consolidation structure

This structure should only be used for mixed group state consolidation returns. The state combined includes 1 nonlife top consolidation, 1 nonlife elimination, and all underlying 1120, 1120-PC, and 1120-L companies. There should be no mid-level subgroup subconsolidations with this structure. This state combined lets every underlying company to be shown on the top consolidation return. Use it for states, such as Illinois and California.
  • Illinois requires every underlying company to be shown on its Schedule UB.
  • The California form requires that both the income and deductions be shown for every underlying company.
This structure should also be used for those states that don't grant subgroup subconsolidations.

Nonlife elimination conversions

You can convert a subgroup elimination return to a nonlife elimination return. This helps those who have eliminating entries on the subgroup eliminations for the federal return. However, for single-tier mixed group state consolidation, since there are no mid-level subgroup subconsolidations, you can't use the subgroup elimination returns.
You can also combine both 1120 and 1120-PC subgroup elimination returns into one nonlife elimination return. This helps those that have eliminating entries on both 1120 and 1120-PC subgroup eliminations for the federal return. This feature combines all 1120 and 1120-PC eliminating entries into one set of entries on the non-life elimination return.
Before you convert, make a copy of the subgroup elimination return.
  • If the parent is an 1120 company, copy the 1120 subgroup elimination return.
  • If the parent is an 1120-PC company, copy the 1120-PC subgroup elimination return.
Steps to convert
  1. In
    Organizer
    , go to
    General Information
    .
  2. Select
    Basic Return Information
    .
  3. On the
    Return/Entity Type Conversion
     tab, select either
    1120-Non-life Eliminations
     or
    1120PC-Non-life Eliminations
    .

E-filing

Attach a copy of the federal return to the mixed group state consolidation return. There are 2 ways you can do this:
  1. Copy the federal return directly from the mixed group state consolidation itself.
  2. Copy the federal return from a different return.
Choose the 2nd option for a mixed group state combined return that uses the single-tier structure, since it is not federally compliant.

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