1120-US: Entering information for Schedule M-3 (FAQ)

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Question

Where do I enter information for Schedule M-3?

Answer

Complete the applicable M3 screens and Screen 8916A in the Balance Sheet folder. When you enter data in the second M3 screen, enter amounts in the Income (Loss) per Income Statement column as positive if it is an income amount and negative if it is a loss amount, unless otherwise noted. When you enter data in the third M3 screen, amounts entered in the Expense per Income Statement column would typically be entered as a positive amount, but do depend on the particular account itself. Some special circumstances, which are noted in the Schedule M-3 instructions, are also noted with instructional text in the second and third M3 screens. Depending on the nature of the difference, each account may have either a temporary or permanent difference and should be entered according to the adjusting entry made on the taxpayer's books.

For Screen 8916A, amounts entered in the Expense per Income Statement column would usually be entered as a positive amount. Amounts in the Income (Loss) per Income Statement column should be entered as positive if it is an income amount and entered as negative if it is a loss amount.

If filing a consolidated S or C Corporation return, enter X in the Member of a consolidated return required to file Schedule M-3 field in the first M3 screen for each member client, including the eliminations client. The remaining fields in this screen should be completed in the consolidated client only. The second and third M3 screens should be completed in full by each of the member clients. The information entered in the second and third M3 screens for each member will be visible in the consolidated client via the Group View dialog.

Note: In form view for a consolidated C Corporation client, Schedule M-3, Page 1 will show only one unit, which is the consolidated unit. Schedule M-3, Pages 2 and 3, will have a consolidated unit (first unit), a parent unit (second unit), subsidiary units (between parent and eliminations unit), and the eliminations unit if applicable (last unit).

Related topic: 1120-US: Schedule M-3 FAQs

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