Tax Type
Corporation Income Tax
Description
Short-year consolidated filing requirements
Topic
Returns/Payments/Records
Date Issued
09-21-1990
September 21, 1990
Re: Ruling Request; Short year consolidated filing requirements
Dear *********
This is in response to your letter of May 7, 1990, in which you requested a ruling on the due date and format of the taxpayer's Virginia consolidated corporation income tax return for the period ended March 1, 1990.
Facts
All of the stock of the taxpayer, the current lead company for the affiliated group's consolidated Virginia income tax return, was sold to an unrelated corporation on March 1, 1990. The taxpayer and its numerous affiliates are included in a consolidated federal tax return which, under controlling federal consolidated return regulations, gives rise to a short-period tax year.
Discussion
Under the federal consolidated return regulations, the short-year tax period income for the sold affiliates is included in the consolidated return for the full 12 months of the other group members. A separate, short year federal return is not required. I.R.C. Reg. §1.1502-76(b).
VR Section §630-3-442(C)(1) requires that a Virginia consolidated return shows consolidated net income prepared in accordance with Internal Revenue Code § 1502 and the regulations thereunder. Because the federal consolidated regulations do not require a short year return, but instead provide that the short year income of the sold affiliates be included in the full year return of the other group members, Virginia requires similar treatment.
Determination
Accordingly, the taxpayer's short period (January and February 1990) results shall be included in the full year (12 month) Virginia consolidated return for the group for the period ending December 31, 1990, and is due April 15, 1991, along with the remaining full year results of the other Virginia group members.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner