Video: Requirements for Affiliated Groups

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of affiliated groups for consolidated corporate tax filings. He clarifies the distinction between common misconceptions about majority ownership percentages and the actual requirement of at least an 80% ownership in both voting power and stock value necessary for forming an affiliated group. Nick also explains the essentials, such as the need for subsidiaries to share the same tax year as the parent corporation and consent to consolidate, drawing parallels with individual tax concepts for clarity. Alongside, he delves into the requirement for consistent treatment of income, deductions, and credits across all corporate entities within the group, as well as the prohibition of separate returns, underpinning the significance of these rules to achieve tax efficiencies when filing as one unified entity.