So I'm wanting to create a holding company that will provide central management across a variety of business streams. The holding company will be a single-member LLC, disregarded, with all profit/loss showing on my individual return for the time being.
I want to create 2 other companies, a C-corp and another single-member LLC, that are wholly owned subsidiaries of the holding company. From what I understand, the holding company can require subsidiaries to allow the parent to file a consolidated return on its behalf.
I have several questions in this scenario:
- Are there any filing requirements at all for the C-Corp with a consolidated return agreement? If not, what documentation is required to demonstrated this consolidated return agreement is in place (e.g. just the Articles of Incorporation or a resolution from a board meeting)?
- Can the profit/loss of the C-corp and other disregarded subsidiary entities such as a sibling single-member LLC be combined (for example if C-Corp lost $10k but LLC profited $10k is this a taxable profit of $0 that reports on my individual return)?
- Does the holding company have to file a corporate tax return on behalf of the consolidated C-corp with the consolidated return agreement in place or given it's a disregarded entity, the combined profit/loss flow to me, the sole individual member?
At a high level, I'm wanting to understand how does profit and loss work for a holding company with different types of entities (e.g. one or more C-Corps and one or more single-member, or multi-member LLC's treated as partnerships) where the holding company wants to share the tax burden across all entities (e.g. a loss of one offsets the profit of another)? From that perspective, I want to treat my holding company as an investment arm across the different business streams that acts as a capital contributor reinvesting profits from one business into growing another business as needed.
Thanks!
