Units and the 5471 Schedule Q Grouping Report

Schedule Q requires information to be reported at a “Unit” level. If the CFC is a subsidiary, parent, corporate single entity, or divisional consolidation with Intercompany Transactions entered at the divisional consolidation level (binder properties > International), all amounts are reported as a single unit – the legal entity. When transferring data for a divisional consolidation processing Intercompany Transactions at the division level, ONESOURCE refers to the Binder Properties > International Tab > QBU for 5471 Reporting Purposes and Tested Unit for GILTI High Tax Exception boxes for each member division to determine if the member should be reported as an individual Unit or if the member should be aggregated with others into the divisional consolidation’s results Schedule Q Lines 1a-1i (Subpart F Income) and Line 4 (Residual Income): Divisions with the QBU for 5471 Reporting Purposes box checked are listed as individual units.
Schedule Q Lines 1a-1i (Subpart F Income) and Line 4 (Residual Income): Amounts for divisions with the QBU for 5471 Reporting Purposes box unchecked are aggregated with the elimination binder and reported as part of the nested or legal entity divisional consolidation unit.
Schedule Q Lines 3 (Tested Income): Divisions with the Tested Unit for GILTI High Tax Exception box checked are listed as individual units.
Schedule Q Lines 3 (Tested Income): Amounts for divisions with the Tested Unit for GILTI High Tax Exception box unchecked are aggregated with the elimination binder and reported as part of the nested or legal entity divisional consolidation unit.
Individual “unit” reporting and grouping outcomes are documented on the Subpart F > Form 5471 and 8858 Reports > 5471 Schedule Q Groupings Report. Each member of the divisional consolidation is listed on the report along with its Tested Unit for GILTI High Tax Exception and QBU for 5471 Reporting Purposes checkbox status and Country of Incorporation from binder properties.
The Schedule Q Line 3 Grouping (for GILTI Tested Income) is determined using the method outlined in the 2020.065 release notes for the GILTI High Tax Exception. The Schedule Q Lines 1 & 4 Grouping (for Subpart F and Residual Income) is determined as follows:
Starting at the bottom of the legal entity divisional consolidation structure processing Intercompany Transactions at the division level.
For each member (division or hybrid entity):
  • If the QBU Reporting Status is On, set the Schedule Q Lines 1 & 4 Grouping to the member.
  • If the QBU Reporting Status is Off
    • If the member belongs to a nested divisional consolidation (a divisional consolidation that is a member of another divisional consolidation), look up the ownership structure until a nested divisional consolidation is located with the QBU Reporting Status On or the upper level (legal entity) divisional consolidation is reached. When the target is determined, set the Schedule Q Lines 1 & 4 Grouping to that divisional consolidation.
    • If the member belongs to the upper level (legal entity) divisional consolidation, set the Schedule Q Lines 1 & 4 Grouping to the legal entity divisional consolidation.
For each elimination:
  • If the elimination belongs to a nested divisional consolidation, look up the ownership structure until a nested divisional consolidation is located with the QBU Reporting Status On or the upper level (legal entity) divisional consolidation is reached. When the target is determined, set the elimination’s Schedule Q Lines 1 & 4 Grouping to that divisional consolidation.
  • If the elimination belongs to the upper level (legal entity) divisional consolidation, set the Schedule Q Lines 1 & 4 Grouping to the legal entity divisional consolidation.
Chat now

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close