Can Form 1120 Schedule M 3 Consolidation 2019-2024

Hi, this is Valerie Chambers, and I'm looking at affiliated corporations and consolidated tax returns in this module. Now, we might have multiple affiliated companies, and we might do that to split risk. For example, if I have a particularly risky business but I also own land and buildings, I might put the land and buildings in one entity, and then the risky business will lease that entity. So, if I were ever sued or the risk were to go awry, I would still be able to hold on to the land and building in that separate entity, and I wouldn't lose absolutely everything. So, risk splitting is okay and it's done all the time for legitimate business purposes. But, multiple tax benefits from entity splitting is not okay. For example, we get an accumulated earnings credit for a company, but if we're essentially one company in terms of function, I can't get an accumulated earnings credit for the company that owns the property and then for the risky business. Also, I would be limited to one. You go back one control groups. Control groups are groups of companies that are controlled by a small number of taxpayers. For example, a parent-subsidiary control group is when one company owns at least 80 percent of the combined voting power or the combined value of all classes of stock of another company. Now that parent may own 80 percent of a subsidiary, which in turn owns 80% of another subsidiary, and so on. Or that parent may own two or three subsidiaries, of which it owns at least 80 percent of the stock in both, for example. So, they're called chains. But one or more chains of corporations are connected through a common parent, and a parent-subsidiary control group. There's also a brother-sister control...