The California 100 We form is a document used by corporations to elect to file on a water’s-edge basis, as outlined in the Revenue and Taxation Code. This form must be attached to either Form 100W or Form 100S and includes essential information about the electing corporation and any corporations covered by the election. Completing this form accurately is crucial for compliance with California tax regulations.
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The California 100 We form, officially known as the Water’s-Edge Election Form 100-WE, is an essential document for corporations seeking to file on a water’s-edge basis. This form is used primarily by corporations operating in California that want to make an election to report their income on a combined basis with other members of their controlled group. By doing so, they can benefit from certain tax advantages under California's Revenue and Taxation Code. The form requires the electing corporation to provide crucial information, such as its name, California corporation number, and address. Additionally, it must specify whether a common parent is making the election on behalf of the entire group. The election period typically begins on the first day of the taxable year and lasts for 84 calendar months, unless terminated earlier according to the rules outlined in the tax code. Corporations included in this election must be clearly listed, ensuring that all relevant parties are accounted for. A signature from an officer of the electing corporation is also necessary to validate the election. This form plays a significant role in how corporations report their income and determine their tax liabilities, making it a key component of corporate tax strategy in California.
TAXABLE YEAR
CALIFORNIA FORM
2011 Water’s-Edge Election
100-WE
Sign Form 100-WE and attach to the back of Form 100W, or Form 100S. Keep a copy for the corporation’s records.
Corporation name
Key California corporation number
Address (suite, room, or PMB no.)
City
State
ZIP Code
WATER’S-EDGE ELECTION
The electing corporation, ____________________________, elects to file on a water’s-edge basis pursuant to Revenue and Taxation
Code (R&TC) Sections 25110 and 25113.
Check here if the common parent is electing on behalf of the water’s-edge group. List each corporation covered by this election below. As the common parent of a controlled group, the corporation hereby elects for all members of the controlled group that are includable in the water’s-edge combined report.
MONTHDAYYEAR
PERIOD: The election shall begin on the first day of the taxable year, I_______________________________, for which the election
can be made and shall, except as otherwise provided by statute or herein, continue for 84 calendar months from that date. The election shall remain in effect until terminated.
TERMINATION: The election may be terminated in accordance with the rules provided by R&TC Section 25113.
___________________________________________________________________
___________________________________________________
Electing Corporation Name
Signature of Officer of Electing Corporation
______________________________________
_______________________
____________________________________________________
Electing Corporation Number
Date
Print or Type Name and Title of Signing Officer
Corporations Covered by the Water’s-Edge Election
Key California corporation name*
Common parent name
FEIN (if applicable)
List of corporations covered by the election
California corporation number
*For definition of a Key Corporation, see FTB Pub. 1061, Guidelines for Corporations Filing a Combined Report. Attach additional sheets if necessary.
Instructions
Enter the corporation name, California corporation number, federal employer identification number (FEIN), if applicable, and address as listed on Form 100W or Form 100S.
Enter the name of the corporation making the election in the space provided described as electing corporation.
Be sure to check the box if a common parent is electing on behalf of members of the controlled group included in the water’s-edge combined report. If there is no common parent election, each electing member of the water’s-edge
group should file its own election, even if a single return is filed on a combined basis. See R&TC Section 25113 for more information. List all taxpayers covered by the common parent’s election on this page. An election made on a group return of a self-assessed combined reporting group shall constitute an election by each taxpayer member included in that group return.
Enter the beginning date of the water’s-edge election in the space provided. This date is generally the same as the beginning date for the taxable year that appears on Form 100W or Form 100S for the first taxable year of the
election. If the corporation is a member of a water’s-edge combined group that has different fiscal-year ends, the election beginning date is the beginning date of the taxable year of the last member of the group to file its return and make the election. For example, if one member of the water’s-edge group has a January 1, 2011 to December 31, 2011 taxable year, and the second member has an April 1, 2011 to March 31,
2012 taxable year, the beginning date of this water’s-edge election is April 1, 2011. See R&TC Section 25113(c)(3) for more information.
An officer of the electing corporation must sign and date the election.
7001113
Form 100-WE C1 2011
Filling out the California 100 We form requires careful attention to detail. This form is essential for corporations electing to file on a water’s-edge basis. Once completed, it should be attached to the back of Form 100W or Form 100S. Keeping a copy for the corporation’s records is also important.
After completing these steps, ensure that the form is attached to the appropriate tax return and retained for your records. Proper filing will help maintain compliance with California tax regulations.
What is the California 100 We form?
The California 100 We form, also known as Form 100-WE, is used by corporations to elect to file on a water’s-edge basis. This election allows corporations to report income from their operations in California while excluding certain foreign income. It is essential for corporations that are part of a controlled group and want to take advantage of this tax treatment.
Who needs to file the 100 We form?
How long does the water’s-edge election last?
The water’s-edge election begins on the first day of the taxable year and continues for 84 calendar months. It remains in effect until it is terminated in accordance with the relevant regulations. Therefore, once made, the election provides a long-term tax strategy for the corporation.
How can a corporation terminate the water’s-edge election?
A corporation can terminate the water’s-edge election by following the rules set forth in Revenue and Taxation Code Section 25113. This may involve submitting a formal notice or completing specific forms to ensure compliance with state regulations.
What information is required on the 100 We form?
The form requires the corporation's name, California corporation number, address, and the name of the electing corporation. Additionally, it asks for details about the common parent, if applicable, and a list of all corporations covered by the election. Accurate and complete information is crucial for the form to be processed correctly.
What if the corporations in the group have different fiscal year ends?
If members of the water’s-edge group have different fiscal year ends, the election's beginning date is based on the taxable year of the last member to file its return. For instance, if one corporation operates on a calendar year and another on a fiscal year ending March 31, the election will start on April 1 for the entire group.
Is a signature required on the 100 We form?
Yes, an officer of the electing corporation must sign and date the form. This signature certifies that the information provided is accurate and that the corporation is making the election in accordance with applicable laws.
Where should the 100 We form be submitted?
The completed 100 We form should be attached to the back of Form 100W or Form 100S when filed with the California Franchise Tax Board. It is also advisable for corporations to keep a copy for their records.
What happens if the form is not filed correctly?
If the 100 We form is not filed correctly or if required information is missing, the election may be considered invalid. This could lead to potential tax liabilities or penalties. Therefore, careful attention should be paid to ensure all details are accurate and complete before submission.
Filling out the California Form 100 We can be a straightforward task, but many people make common mistakes that can lead to complications. One frequent error is failing to provide the correct corporation name. It’s crucial to ensure that the name matches exactly with what is listed on Form 100W or Form 100S. An incorrect name can delay processing and may even result in penalties.
Another mistake often made is not checking the appropriate box regarding the common parent’s election. If a common parent is electing on behalf of the water’s-edge group, this box must be checked. Neglecting to do so can cause confusion about which corporations are included in the election, leading to potential issues down the line.
Additionally, individuals sometimes forget to list all corporations covered by the water’s-edge election. Each corporation that falls under this election needs to be clearly identified. Omitting any corporation can invalidate the election for that entity, which could have serious tax implications.
Many people also overlook the importance of entering the correct beginning date for the water’s-edge election. This date should align with the taxable year start date on the primary forms. If the dates do not match, it can create discrepancies that complicate the entire filing process.
Another common oversight is not having an authorized officer sign and date the form. The signature is a vital part of the process, as it verifies that the information provided is accurate. Without it, the form may be considered incomplete, resulting in delays or rejection.
Lastly, some individuals fail to keep a copy of the completed form for their records. This can lead to difficulties if there are questions or disputes regarding the election in the future. Maintaining a copy ensures that you have all necessary documentation readily available.
The California 100 We form is an essential document for corporations electing to file on a water's-edge basis. However, it is often used in conjunction with several other forms and documents that help streamline the process and ensure compliance with state regulations. Below is a list of commonly associated documents that may be required or beneficial when filing the 100 We form.
Each of these forms plays a vital role in the overall tax filing process for corporations electing the water's-edge basis. It is crucial to ensure that all necessary documents are completed accurately and submitted on time to avoid penalties or complications. Consulting with a tax professional can also provide clarity on the specific requirements for your corporation's situation.
When filling out the California 100 We form, it's essential to follow specific guidelines to ensure accuracy and compliance. Here’s a list of things you should and shouldn't do:
Following these guidelines will help streamline the process and avoid potential issues with your submission.
Understanding the California 100 We form can be challenging, and several misconceptions may lead to confusion. Here are four common misunderstandings regarding this form:
By addressing these misconceptions, corporations can better navigate the complexities of tax reporting and ensure compliance with California tax laws.