California Combined Reports Missing Information
It has come to our attention that numerous combined reports are being filed with missing or incomplete information. Specifically, the combined reports are missing the income breakdown spreadsheets or the spreadsheets are incomplete. These detailed spreadsheets assist in verifying net operating losses (NOL) and various tax credits. Missing or incomplete spreadsheets could result in processing delays and erroneous assessments.
California combined reports are required to present the group’s data by each corporation, as well as totals for the combined group.
A California combined report should contain all of the following:
- A list of subsidiaries/affiliates, their California corporation numbers, and federal employer identification numbers (FEINs).
- A combined profit and loss statement in column format disclosing each corporation’s statement of profit and loss.
- A schedule in column format disclosing the various adjustments for each corporation necessary to convert the combined profit and loss statement to the combined income subject to apportionment. This schedule includes any adjustments necessary to revise federal or foreign income reported for California purposes, as well as adjustments for income from a separate trade or business or for nonbusiness income or loss.
- A combined apportionment formula in column format disclosing for each corporation the total amount of property, payroll, and sales, and the amount of California property, payroll, and sales.
- A schedule in column format disclosing for each corporation any items of nonbusiness income or expense allocated to California.
- Schedules disclosing the computation of the charitable contributions adjustment.
- A schedule in column format of the alternative minimum tax calculation for each corporation.
- Schedules in column format disclosing for each corporation all data required by Form 100 or Form 100W. These schedules include:
- Balance sheets.
- Gains and losses from sale or exchange of assets.
- Taxes on or measured by income.
- Dividends and interest received.
- Income or loss from rentals, royalties, partnerships, and miscellaneous sources.
- Net operating losses.
- Schedules in column format showing the computation of income apportionable and allocable to this state for each member of the group, and the computation of each member’s tax credits and tax liability.
A comprehensive example illustrating the use of the above schedules can be found in FTB Pub. 1061.