Consolidated Tax Return

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DEFINITION of 'Consolidated Tax Return'

A comprehensive tax return that encompasses a group of smaller entities. Consolidated tax returns are often filed by business conglomerates on behalf of all subsidiary firms. They are filed both for simplicity and to allow the parent organization to receive tax benefits that may otherwise be forfeited. However, conglomerates do not need to file this type of return if they choose not to do so.

BREAKING DOWN 'Consolidated Tax Return'

Consolidated tax returns are filed using the same forms and rules as all other taxpaying entities; however, a parent-subsidiary relationship must exist in order to allow for this type of filing. The IRS has allowed consolidated tax returns for nearly 100 years, and rules for filing have remained largely unchanged since the 1960s.

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RELATED FAQS
  1. What is the difference between a subsidiary and a sister company?

    The difference between a subsidiary and a sister company lies in their relationship to the parent company and to each other. A ... Read Full Answer >>
  2. Does everyone have to file a federal tax return?

    This may come as a surprise to many individuals, but not everyone needs to file a federal tax return. According to the IRS, ... Read Full Answer >>
  3. How can I make sure that past IRS errors have been corrected?

    It depends. If these were Traditional IRA contributions, they may be reflected on your tax return. Otherwise, you may ask ... Read Full Answer >>
  4. What is the difference between a green field and a brown field investment?

    Green-field and brown-field investments are two different types of foreign direct investment, or FDI. Green-field investments ... Read Full Answer >>
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    AT&T had a history reaching back to 1885 and, as a government-supported monopoly, was a highly profitable company. Colloquially ... Read Full Answer >>
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