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consolidated tax group, total assets at the end of the tax year must be determined based on the total year-end assets of all includible corporations listed on Form 851, net of eliminations for intercompany transactions and balances between the includible corporations. In the case of an 1120 mixed group, Parts II and III of Schedule M-3 (Form 1120) must be completed for all members of the mixed group whether Schedule M-3 (Form 1120) is required or voluntarily filed.
consolidated tax group files Form 1120 and files and completes Schedule M-3, Parts II and III, Schedule M-3, Parts II and III, must be completed for each member of the group. A mixed group must also file Form 8916, Reconciliation of Schedule M-3 Taxable Income with Tax Return Taxable Income for Mixed Groups and, if applicable, Form 8916-A, Supplemental Attachment to Schedule M-3. If the filer chooses to complete Schedule M-1 instead of completing Parts II and III of Schedule M-3, line 1 of the applicable M-1 must equal line 11 of Part I of Schedule M-3.
If any member has failed to join in the making of a consolidated return under either subparagraph (1) or (2) of this paragraph, then the tax liability of each member of the group shall be determined on the basis of separate returns unless the common parent corporation establishes to the satisfaction of the Commissioner that the failure of such member to join in the making of the consolidated return was due to a mistake of law or fact, or to inadvertence.
In such case, such member shall be treated as if it had filed a Form 1122 for such year for purposes of paragraph (h)(2) of this section, and thus joined in the making of the consolidated return for such year.
A group which did not file a consolidated return for the immediately preceding taxable year may file a consolidated return in lieu of separate returns for the taxable year, provided that each corporation which has been a member during any part of the taxable year for which the consolidated return is to be filed consents (in the manner provided in paragraph (b) of this section) to the regulations under section 1502.
If a group wishes to exercise its privilege of filing a consolidated return, such consolidated return must be filed not later than the last day prescribed by law (including extensions of time) for the filing of the common parent's return.The consent of a corporation referred to in paragraph (a)(1) of this section shall be made by such corporation joining in the making of the consolidated return for such year.A corporation shall be deemed to have joined in the making of such return for such year if it files a Form 1122 in the manner specified in paragraph (h)(2) of this section.A combined controlled group is three or more corporations each of which is a member of either a parent-subsidiary group or a brother-sister group, and at least one of which is both the common parent of a parent-subsidiary group and also a member of a brother-sister group. Two or more life insurance companies subject to tax under section 801 which are members of any parent-subsidiary, brother-sister, or combined controlled group will be treated as a controlled group of corporations separate from any other type of controlled group to which these corporations would otherwise belong if they were not life insurance companies.The life insurance companies that make up a life insurance controlled group do not have to be in a direct ownership relationship with each other.For tax years beginning on or after January 1, 1993, the same form is used to file an amended return that was used to file the original return.