Blank 851 is for filing a consolidated tax return by a parent corporation and some of its subsidiaries. However, a company should remember that in the first year it was established the parents and affiliated companies should first submit Form 1122.
A return like this has a number of advantages, including centralized planning, reporting, and payment processing. If the corporation votes in favor of a consolidated benefit, it should do it every year or until the corp asks the IRS for a change.
Before completing the 3-page template, prepare the information in advance. The template consists of four sections:
- Overpayment credits and deposits
- Key business activity
- Changes in stock holdings
- Stock information
When is Form 851 Required?
The sample is for a parent company to file a consolidated tax return. The purpose of the template is to:
- Define a common corporation and its members;
- Pramounts of overpayment credits, deposits, and other related payments;
- Identify subsidiaries as members of the group.
Who Should File Form 851?
The document must be submitted by a parent and its affiliated companies in which the first filer owns 80% of the vote.