What Is a Consolidated Tax Return?

[jasminsain]

Can someone explain what a consolidated tax return is? I’ve heard that companies with multiple subsidiaries can file one combined return instead of separate ones. How does it work, and what are the main advantages or requirements for filing a consolidated tax return?

 

[isabel]

A consolidated tax return is one in which a parent company and its subsidiaries prepare a single tax return that gives a company an opportunity to report easily, and also it gives a parent company an opportunity to offset losses incurred by one company and the profits in another company.

 

[robertwilliam]

A consolidated tax return is one income tax return that is filed by a family of related companies and treats these companies as one for tax purposes. This method enables the affiliated group of companies, mostly a parent company along with its subsidiaries, to put together their income, deductions, gains, losses, and credits on a single return, for example, Form 1120 in the U.S.

 

[jainnorton]

When a parent company and its subsidiaries choose to file a single income tax return, it is known as a consolidated tax return. The businesses can report their combined tax liability using this method.

 

[danisjohn]

A consolidated tax return is a single tax filing that covers a parent company and all of its subsidiaries as one entity. Instead of each company filing separately, they combine their income, losses, and tax deductions into one return to simplify reporting and possibly reduce taxes.

 

[peterkavinsky]

A consolidated tax return is a single tax filing that combines the financial information of a parent company and its subsidiaries, allowing them to report as one entity for tax purposes.