Tax Type
Corporation Income Tax
Description
Merged corporations
Topic
Returns/Payments/Records
Date Issued
09-15-1987
September 15, 1987
Ruling Request: Corporate Income Tax
Dear *****************
This will reply to your letter of August 11, 1987 in which you request guidance concerning corporate income tax return filing requirements.
Facts
You have provided the following information. Your client, Company X, which reports its taxable income on a calendar year basis, acquired 100% of the outstanding capital stock of Company Y on June 10, 1987. Y was merged into X on July 27, 1987. Y, who was a member of a consolidated group for federal tax purposes which filed its income tax returns on an October 31 fiscal year end basis, will file a return for the period November 1, 1986 to June 10, 1987.
Your client is considering, for federal purposes, filing one return for X for calendar year 1987 which would include the income or loss of Y for the period of June 11 through December 31, 1987. Your client would treat the merger as having occurred on June 10, 1987, so a consolidated return would not be filed. You ask what returns would be required for Virginia purposes, and applicable due dates if returns are due for either X or Y for a Period ending other than December 31, 1987.
Determination
Pursuant to Va. Code §58.1-440 and Virginia Corporation Income Tax Regulations VR 630-3-440 (copies enclosed), a corporate taxpayer's taxable year and method of accounting shall be the same for Virginia income tax purposes as it is for federal income tax purposes. Accordingly, permission is hereby granted to file a Virginia corporation income tax return on the same basis as the federal, that is, a return for X for calendar year 1987 which includes Y's income or loss for the period June 11 through July 27, 1987. However, if X subsequently files an amended federal return for calendar year 1987, it would be required to similarly amend its calendar year 1987 Virginia filing.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner