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Foreign divisional consolidations

Create a foreign divisional consolidation

Foreign divisional consolidations can be foreign partnerships, controlled foreign corporations or 10/50 Companies (Binder Properties). Beginning in tax year 2009, foreign divisional consolidation binders can be created as legal or foreign disregarded entities. The legal entity configuration is also referred to as an “upper tier” divisional consolidation and is identified by:
When you create a foreign divisional consolidation binder, the International Data Completion Level indicator (also referred to as the "sourcing level") determines whether the system looks to the divisional consolidation's data entry screens or its member (division) binders during computes.
  • When the foreign divisional consolidation's International Data Completion Level is Division, the international calculations and comprehensive edits use the sourcing workpaper, interest apportionment and current year tax information in the member (division) binders. The consolidated amounts are reflected in the divisional consolidation binder's screens.
  • When the foreign divisional consolidation's International Data Completion Level is Divisional Consolidation, the international calculations and comprehensive edits use the sourcing workpaper, interest apportionment and current year tax information in the foreign divisional consolidation binder. Data in the member (division) binders gets ignored.
  • an entity type of
    Divisional Consolidation
  • an international filing type of
    Foreign Entity
  • an international entity type (binder’s Properties) of
    Foreign Entity
  • a binder type of
    Income Tax
A foreign divisional consolidation that is a disregarded entity is also referred to as a “lower tier”, “nested”, or “hybrid” divisional consolidation and is identified by:
  • an entity type of
    Divisional Consolidation
  • an International Filing Type of
    Division of Foreign Entity
  • an international entity type (binder Properties) of
    Foreign Entity
  • a binder type of
    Income Tax
A single instance of Form 8858 is created in the tax year 2009 (and later) Organizer for all foreign divisional consolidations regardless of the international entity type. TAS transfers consolidated amounts to the Form 8858; the Organizer of a foreign entity divisional consolidation does not consolidate the Form 8858s in the member binders.
  1. On the
    Binders
     list, select the appropriate
    Workarea
    from the dropdown.
  2. Select
    Add Binder
    .
  3. Enter the Binder name.
  4. Select
    Divisional Consolidation
    .
  5. Select the
    International
     tab.
  6. Select
    Foreign Entity
     from the
    International
    Entity Type
    dropdown. The International Filing Type cannot be changed once it is selected. The Type of Return should be set to
    1120-U.S. Corporation
     for a foreign entity.
  7. Select the
    Country of Incorporation
     from the dropdown.
  8. For the international calculations to perform as expected, enter a unique identifier in the Company No. field, and select the fiscal date fields consistently for all binders in the international ownership structure. Leave the fiscal date fields empty if you are a calendar year filer.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax
  • Return type: 1120 Corporation
  • Subject: Consolidations

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