I have multiple LLC's that are 100% owned by another LLC, each with their own instance of QBO. How do I consolidate these to generate a single tax return?

[Witmore2020]

I can generate individual tax returns in ProConnect but can't get them to consolidate.

[sjrcpa]

Is the top level LLC filing a 1065, 1040, or 1120S or 1120?

What activity(ies) are the lower level LLCs? 

[Witmore2020]

They are all 1065 status LLC's

[PhoebeRoberts]

They can't all be 1065s. The 100% owned LLCs are either disregarded entities or C-corps, and your initial comment implied that they were disregarded. 

Are the lower level businesses carrying out activities that would normally be on an 8825 (rentals), or on page 1 (non-rental trade or business), or Schedule K (investment activities)?

[Witmore2020]

Two of the llc's are owned mobile home communities and another one provides payroll services to the mobile home communities.  All of these are owned by a management company which is owned by multiple members.  I have Quickbook companies set-up for each one of these businesses.

[sjrcpa · Accepted solution]

And the management company is filing what type of tax return?

Consolidated tax returns is a C corporation thing. Two or more C corps file a consolidated tax return. You don't have this situation.

On the management company's tax return, all activities of the 100% owned LLCs get reported as if the 100% owned LLCs did not exist.

Excel is your friend. Export all of the 100% owned LLCs trial balances to Excel. Combine them into 1 trial balance. Make any eliminating entries. It is a pain. The tax return software will not do this for you.

You may have some trial balance software that will do this for you.

It is like consolidation but it is not consolidation.

[Witmore2020]

Thanks.  Was hoping ProConnect had some capability to do these, but does not sound like it.  Appreciate the feedback.

[cpaSpencer]

We have this situation too with a holding company that supports several SMLLs which hold commercial rentals.  We set these up in QBO with Class (Location) codes for each SMLLC. This way, you can print and export the consolidated results. When you need separate entity information, you can pull P&L and Balance Sheet reports that show the classes.  Works great for income, not quite as easy for the balance sheet.

When we need separate reports by entity, I export the reports with Classes to Excel and then hide the columns I don't need. 

When we set up on QBO, the Class codes didn't attach to the opening balances (e.g., bank accounts).  Not sure whether this was our set-up contractor or the system but I can't add class locations after the fact for the opening balances. So we have to manually add the historical opening balance to the ending balance in QBO to get the correct ending balance that ties to the bank.

Since these are SMLLCs, I'm not worried about the separate equity section.  Like the bank accounts, the equity section needs to be summed together and reconciled if you make distributions from the LLCs to the parent company.

[Witmore2020]

Thanks for the feedback.  May be something I should be revisiting and might work better.