• Form 8869 - Qualified Subchapter S Subsidiary Election.
• Form 1122 - Authorization and Consent of Subsidiary Corporation. To Be Included in a Consolidated Income Tax Return.

Although both forms are identical in nature, they are used for different purposes.

1. When multiple subsidiaries wish to file a consolidated return, Form 8869 is utilized.
2. To file a consolidated return, a subsidiary must use Form 1122 along with corporation return.
3. Form 1122 is required for each subsidiary to file its own return as part of the Consolidated Return.
4. In the Single Entity Return or Form 8869, each subsidiary will not file its return, rather only one consolidated return will be filed.
5. Under this structure, the subsidiaries are classified as Qualified Subchapter S Subsidiaries (Q-Subs), meaning they are wholly owned by the parent company and are not treated as separate entities for federal tax reporting. Instead, their income, deductions, and credits are consolidated with the parent company’s tax return.
6. For tax filing purposes, this consolidated return is treated as a Single Entity, ensuring streamlined reporting and compliance with IRS regulations governing S Corporations and their subsidiaries.
7. If, there is no change in ownership, neither capital gain nor ordinary income will be realized or recognized under Section 368(a)(1)(F) of the Internal Revenue Code. This transaction qualifies as a reorganization rather than a termination, meaning there is no requirement to file final tax returns.
8. The primary purpose of this reorganization is to simplify the tax filing process, rather than to obtain any specific tax benefits. By consolidating filings, we aim to enhance administrative efficiency while maintaining compliance with applicable tax regulations.
9. The purpose of filing form 8869 is reorganization rather than termination.
10. Form 8869 results in a subsidiary losing its identity, unlike Form 1122.