IRS Form 851 "Affiliations Schedule"

What Is Form 851?

IRS Form 851, Affiliations Schedule, is a form that a parent corporation of an affiliated group should submit in addition to its consolidated income tax return.

Alternate Name:

  • Affiliations Schedule Form.

The purpose of submitting Form 851 is to report information about overpayment credits, estimated tax payments, and tax deposits, related to a common parent corporation and their subsidiary corporations. An 851 Form allows the identification of a common parent corporation and each subsidiary corporation and to define that each one of them can be qualified as a member of the affiliated group.

This form was released by the Department of the Treasury Internal Revenue Service and the latest version was issued in October 2016. A fillable 851 Form is available for download below.

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Form 851 Instructions

The instructions for filling in an Affiliations Schedule Form are the following:

An applicant has to indicate the tax year, enter the name of the common parent corporation, its Employer identification number, and address.

  1. Part I. A filer should enter the Employer Identification Number of each entity. Provide names and addresses of subsidiary corporations. Indicate the amount of overpayment credits and estimated tax payments for every organization separately and its total amount. Provide the amount of the tax deposited with IRS Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, related to every corporation and its total amount as well. Form 7004 is used by applicants to extend the filing period for a specific business income tax. The total amounts, provided in this part, must fit the corresponding amounts indicated on the consolidated income tax return.
  2. Part II. A filer should indicate the Principal Business Activity (PBA) and its code number for each corporation. Provide information regarding making any non-dividend distributions and stock holdings of these corporations at the beginning of the year.
  3. Part III. An applicant should provide information about the changes in stock holdings that occurred during the tax year.
    • Questions A-B. Indicate the number of shares purchased and disposed of, percentages of voting power and value;
    • Questions C-D. Answer "Yes" or "No" to the additional questions regarding a share of subsidiary stock;
    • Questions E-F. Indicate the details about the presence of the equitable owners and issuing the additional stock;
  4. Part IV. An applicant should provide additional stock information for the tax year.
    • Question 1. In the case of presence of the several classes of stock outstanding in the corporation, an applicant should describe each one;
    • Question 2. If there was any corporation that reaffiliated within 60 months of disaffiliation, provide an explanation;
    • Question 3. In the case of availability of the arrangement, such as stock appreciation rights, warrant, or an option, provide information about it. On Items A, B, C, an applicant has to indicate percentages of the value, the outstanding voting stock, and voting power that a person that is not a member of the affiliated group could acquire. On Item d, provide a description of any arrangement described.
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Download IRS Form 851 "Affiliations Schedule"

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851
Affiliations Schedule
Form
For tax year ending
,
OMB No. 1545-0123
(Rev. October 2016)
File with each consolidated income tax return.
Department of the Treasury
Information about Form 851 and its instructions is at www.irs.gov/form851.
Internal Revenue Service
Name of common parent corporation
Employer identification number
Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state, and ZIP code
Part I
Overpayment Credits, Estimated Tax Payments, and Tax Deposits (see instructions)
Portion of
Employer
Portion of tax
Corp.
overpayment credits
Name and address of corporation
identification
deposited with
No.
and estimated
number
Form 7004
tax payments
1
Common parent corporation
Subsidiary corporations:
2
3
4
5
6
7
8
9
10
Totals (Must equal amounts shown on the consolidated tax return.) .
.
.
.
Part II
Principal Business Activity, Voting Stock Information, Etc. (see instructions)
Stock holdings at beginning of year
Did the subsidiary
PBA
make any nondividend
Corp.
Number
Percentage
Owned by
Principal business activity (PBA)
Code
Percentage
distributions?
No.
of
of voting
corporation
No.
of value
shares
power
no.
Yes
No
Common parent corporation
1
Subsidiary corporations:
2
%
%
3
%
%
4
%
%
5
%
%
6
%
%
7
%
%
8
%
%
9
%
%
10
%
%
851
For Paperwork Reduction Act Notice, see instructions.
Form
(Rev. 10-2016)
Cat. No. 16880G
851
Affiliations Schedule
Form
For tax year ending
,
OMB No. 1545-0123
(Rev. October 2016)
File with each consolidated income tax return.
Department of the Treasury
Information about Form 851 and its instructions is at www.irs.gov/form851.
Internal Revenue Service
Name of common parent corporation
Employer identification number
Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state, and ZIP code
Part I
Overpayment Credits, Estimated Tax Payments, and Tax Deposits (see instructions)
Portion of
Employer
Portion of tax
Corp.
overpayment credits
Name and address of corporation
identification
deposited with
No.
and estimated
number
Form 7004
tax payments
1
Common parent corporation
Subsidiary corporations:
2
3
4
5
6
7
8
9
10
Totals (Must equal amounts shown on the consolidated tax return.) .
.
.
.
Part II
Principal Business Activity, Voting Stock Information, Etc. (see instructions)
Stock holdings at beginning of year
Did the subsidiary
PBA
make any nondividend
Corp.
Number
Percentage
Owned by
Principal business activity (PBA)
Code
Percentage
distributions?
No.
of
of voting
corporation
No.
of value
shares
power
no.
Yes
No
Common parent corporation
1
Subsidiary corporations:
2
%
%
3
%
%
4
%
%
5
%
%
6
%
%
7
%
%
8
%
%
9
%
%
10
%
%
851
For Paperwork Reduction Act Notice, see instructions.
Form
(Rev. 10-2016)
Cat. No. 16880G
2
Form 851 (Rev. 10-2016)
Page
Part III
Changes in Stock Holdings During the Tax Year
(b) Shares held after
(a) Changes
changes described in
Share-
column (a)
Date
Corp.
holder of
Name of corporation
of
No.
Corpora-
transaction
Number of
Number of
tion No.
Percentage of
Percentage of
shares
shares
voting power
value
acquired
disposed of
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
(c)
If any transaction listed above caused a transfer of a share of subsidiary stock (defined to include
dispositions and deconsolidations), did the share's basis exceed its value at the time of the transfer? See
instructions .
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Yes
No
(d)
Did any share of subsidiary stock become worthless within the meaning of section 165 (taking into account
the provisions of Regulations section 1.1502-80(c)) during the taxable year? See instructions .
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Yes
No
(e)
If the equitable owners of any capital stock shown above were other than the holders of record, provide details of the changes.
(f)
If additional stock was issued, or if any stock was retired during the year, list the dates and amounts of these transactions.
851
Form
(Rev. 10-2016)
3
Form 851 (Rev. 10-2016)
Page
Part IV
Additional Stock Information (see instructions)
1
During the tax year, did the corporation have more than one class of stock outstanding? .
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Yes
No
If “Yes,” enter the name of the corporation and list and describe each class of stock.
Corp.
Name of corporation
Class of stock
No.
2 During the tax year, was there any member of the consolidated group that reaffiliated within 60 months of
disaffiliation?
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Yes
No
If “Yes,” enter the name of the corporation(s) and explain the circumstances.
Corp.
Name of corporation
Explanation
No.
3 During the tax year, was there any arrangement in existence by which one or more persons that were not
members of the affiliated group could acquire any stock, or acquire any voting power without acquiring
stock, in the corporation, other than a de minimis amount, from the corporation or another member of the
affiliated group? .
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Yes
No
If “Yes,” enter the name of the corporation and see the instructions for the percentages to enter in columns
(a), (b), and (c).
(b)
(c)
(a)
Corp.
Percentage of
Name of corporation
Percentage of
No.
Percentage of value
outstanding voting
voting power
stock
%
%
%
%
%
%
%
%
%
%
%
%
Corp.
(d) Provide a description of any arrangement.
No.
851
Form
(Rev. 10-2016)
4
Form 851 (Rev. 10-2016)
Page
Instructions
Part I
Item (e). The term “equitable owners” of
stock means those that essentially have all
Portion of overpayment credits and
Section references are to the Internal Revenue
the rights to enjoy the benefits of stock
estimated tax payments. Enter for the
Code unless otherwise noted.
ownership without actually holding the stock,
common parent corporation and for each
Future Developments
for example, beneficiaries of a trust.
subsidiary corporation the amount of:
For the latest information about developments
Part IV
• Overpayments of tax from the prior tax year
related to Form 851 and its instructions, such
that each corporation elected to credit to the
Question 1. For purposes of question 1 only,
as legislation enacted after they were
current year's tax, and
disregard certain preferred stock as described
published, go to www.irs.gov/form851.
• Estimated tax payments made by each
in section 1504(a)(4).
corporation.
Purpose of Form
Question 3. The term “arrangement”
The total must be the same as the amounts
includes, but is not limited to, phantom stock,
Use Form 851 to:
entered on the lines for overpayments and
stock appreciation rights, an option, warrant,
1. Identify the common parent corporation
estimated tax payments on the consolidated
conversion feature, or similar arrangements.
and each member of the affiliated group;
income tax return.
Item 3a. Show the percentage of the value of
2. Report the amount of overpayment
Tax deposited with Form 7004. Enter for the
the outstanding stock that the person(s) could
credits, estimated tax payments, and tax
common parent the tax deposited with Form
acquire.
deposits attributable to each corporation; and
7004, Application for Automatic Extension of
Item 3b. If the arrangement was associated
3. Determine that each subsidiary
Time To File Certain Business Income Tax,
with voting stock, show the percentage of
corporation qualifies as a member of the
Information, and Other Returns, that is
outstanding voting stock that the person(s)
affiliated group.
attributable to each corporation. The total
could acquire.
must be the same as the amount entered on
Who Must File
Item 3c. If the arrangement was associated
the “Tax deposited with Form 7004” line on
The parent corporation must file Form 851 for
with the acquisition of voting power without
the consolidated income tax return.
itself and for corporations in the affiliated
the acquisition of the related stock, show the
Part II
group. File Form 851 by attaching it to the
percentage of voting power that the person(s)
consolidated tax return for the group.
could acquire.
Principal business activity (PBA) and PBA
Item 3d. Give a brief description of any
Code No. Enter the PBA and the PBA code
Affiliated Group
arrangement (defined above) by which a
number for the common parent corporation
An affiliated group is one or more chains of
person that is not a member of the affiliated
and for each subsidiary corporation. Use the
includible corporations connected through
group could acquire any stock, or acquire any
activity for the specific industry group from
stock ownership with a common parent
voting power without acquiring stock, in the
which the largest percentage of each
corporation. See sections 1504(a) and (b). The
corporation.
corporation's total receipts is based.
common parent must be an includible
A list of the PBAs and code numbers is
corporation and the following requirements
Paperwork Reduction Act Notice
located in the Instructions for Form 1120.
must be met.
Nondividend distributions. Nondividend
We ask for the information on this form to
1. The common parent must own directly
distributions are any distributions (other than
carry out the Internal Revenue laws of the
stock that represents at least 80% of the total
stock dividends and distributions in exchange
United States. You are required to give us the
voting power and at least 80% of the total
for stock) made to shareholders during the
information. We need it to ensure that you are
value of the stock of at least one of the other
tax year for which the consolidated tax return
complying with these laws and to allow us to
includible corporations.
is filed that were in excess of the
figure and collect the right amount of tax.
2. Stock that represents at least 80% of
corporation's current and accumulated
You are not required to provide the
the total voting power, and at least 80% of
earnings and profits. See sections 301 and
information requested on a form that is
the total value of the stock of each of the
316 and Form 5452, Corporate Report of
subject to the Paperwork Reduction Act
other corporations (except for the common
Nondividend Distributions.
unless the form displays a valid OMB control
parent) must be owned directly by one or
number. Books or records relating to a form
Part III
more of the other includible corporations.
or its instructions must be retained as long as
For this purpose, the term “stock” generally
Question (c). For this purpose, the term
their contents may become material in the
doesn't include any stock that:
“transfer” includes transactions in which (1) a
administration of any Internal Revenue law.
1. Is nonvoting,
shareholder-member ceases to own a share
Generally, tax returns and return information
of subsidiary stock in a transaction in which
2. Is nonconvertible,
are confidential, as required by section 6103.
the shareholder-member recognizes income,
3. Is limited and preferred as to dividends
The time needed to complete and file this
gain, deduction, or loss on the stock; (2) a
and doesn't participate significantly in
form will vary depending on individual
shareholder-member and the subsidiary
corporate growth, and
circumstances. The estimated burden for
cease to be members of the same
4. Has redemption and liquidation rights
business taxpayers filing this form is
consolidated group; and (3) a nonmember
that don't exceed the issue price of the stock
approved under OMB control number
acquires the share from a member. If any type
(except for a reasonable redemption or
1545-0123 and is included in the estimates
of transfer occurs and the share's basis would
liquidation premium).
shown in the instructions for their business
otherwise exceed its value at the time of the
income tax return.
Address
transfer, certain adjustments to members'
If you have comments concerning the
bases in shares of the subsidiary's stock and
Include the suite, room, or other unit number
accuracy of these time estimates or
to the subsidiary's attributes may be required.
after the street address. If the post office
suggestions for making this form simpler, we
See Regulations section 1.1502-36.
does not deliver mail to the street address
would be happy to hear from you. See the
Question (d). If a share of subsidiary stock
and the corporation has a P.O. box, show the
instructions for the tax return with which this
becomes worthless within the meaning of
box number instead.
form is filed.
section 165 (taking into account the
Corporation Numbers
provisions of Regulations section
When listing information in Parts II, III, and IV,
1.1502-80(c)) during the group's taxable year,
use the same number for the common parent
certain adjustments to shareholder-members'
corporation and for each subsidiary
bases in shares of the subsidiary's stock
corporation as the number listed in Part I.
and/or to the subsidiary's attributes may be
required. See Regulations sections 1.1502-19
(b)(1)(iv) (if the basis of the share is equal to or
less than zero) and 1.1502-36 (if the basis of
the share is greater than zero).
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