Insurance Returns: Consolidating the Return

Preparing for Consolidation

Before beginning any consolidations, all individual company returns should be completed and balanced. Ensure that the return/entity type is marked correctly in each return. All of the components for the consolidation must be prepared before beginning the consolidation process, which includes entering the company data in the 1120, 1120-PC, and 1120-L tax returns. If states are to be consolidated, the particular states to be consolidated must be activated in every return in the consolidation (even if it is not filed by a particular company) in the state Organizer Add/Delete screen.

Elimination Return

Every consolidation group must have an elimination return. All inter-company transactions to be eliminated for tax purposes are entered in the elimination return.

Nonlife eliminating entries can be entered using the same 1120 subgroup's Income/Deductions and Schedule M-3 screens.

A subgroup elimination return can be converted to a nonlife elimination return. (See Step 2: Choose Return/Entity Type for more information on changing entity types.) All entries made will be automatically transferred from the subgroup elimination company to the Nonlife eliminations company.

Types of Elimination Returns

• LNL topcon elimination
• NL elimination
• Subgroup eliminations.

Nonlife Elimination

The Nonlife return has an elimination company in which intercompany entries can be made between the 1120 and the 1120-PC returns. These elimination entries are made in the NL elimination entry screens. There are limited data entry fields in the Nonlife elimination return. The Nonlife elimination return is not included in the e-file sent to the IRS, but it does consolidate to the top level consolidation.

Insurance Consolidations Step 2 - Eliminating entries

In the Nonlife Elimination Organizer, you have to choose the proper return entity tab to enter data, 1120 or 1120-PC. The following screens have fields available to enter data:

• 1120 Income & Deductions
• 1120 Balance Sheet (beginning and ending balances)
• 1120 M-1 & M-2
• 1120 M-3 Part II & III
• 1120-PC Income & Deductions
• 1120-PC Balance Sheet (beginning and ending balances)
• 1120-PC M-1 & M-2
• 1120-PC M-3 Part II & III

Subgroup Elimination

Each subgroup Subconsolidation has its own subgroup Elimination return. The elimination return type matches the subgroup return type 1120, 1120-L or 1120-PC. Subgroup elimination returns are there to make the intercompany and elimination entries for the subgroup.

 

 

 

1120/oit_ins_consol_1.htm/TY2021

Last Modified: 03/20/2020

Last System Build: 01/31/2023

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