Do you need to? If each becomes an S Corp, they are not eligible members of a consolidated filing group.

I am completely clueless about this, and hopefully Susan is right and it would be automatic, but ...

Regulation §1.1502-75(c) is where it mentioned that election, and you must have "good cause" un-consolidate them.

https://www.law.cornell.edu/cfr/text/26/1.1502-75

It says you need permission, and based on this PLR, it seems like you might need to do a PLR, which is challenging and expensive.

https://www.irs.gov/pub/irs-wd/0944014.pdf

But I don't think (or really know), if conversion to S Corp status automatically revokes the consolidated election. I read somewhere the election IS Permanent... which led me to my question...

Bill,,,, that is exactly the reference site I went too....which is about the most information I could find...

I believe @sjrcpa is correct. If you look up consolidated tax return definition it says. Note the bold " until the affiliated group terminates"

Electing to File a Consolidated Tax Return

Each affiliated corporation must consent to file a consolidated tax return by filing Form 1122 and returning it along with Form 1120, the tax form for U.S. corporations. After that point, any new member of the associated group must join in the consolidated tax return. Single affiliates may leave the consolidated group without the group's status being terminated. The election to file consolidated returns can be difficult to revoke for the group. Once made, the choice remains binding on all subsequent tax years until the affiliated group terminates. The Internal Revenue Service (IRS) may grant permission to discontinue the election.

so you think, by filing the 2553s for both entities would terminate the affiliated group? But the next line says

"The Internal Revenue Service (IRS) may grant permission to discontinue the election."

So I'm wondering if I still have to request 'unconsolidation' from the Commissioner.  The link the @TaxGuyBill alluded to appears to mean that, to me at least.  Thank y'all for your time on this. Been a CPA for 35 years, (all be it in a rural area), but i've never run across this before.

I'll be glad  to discuss next week. I'm brain dead now.

yeah... this was actually my 'escape time' from this deadline,  I didn't realize i had extended so many corps and partnerships. Down to 3 returns, and midnight  is certainly looming. 

Did you ever figure out what to do? I have a client in a similar situation, but one corp is dissolving and the other is remaining a C-corp...