Calculating Schedules M-1 and M-2 (1120)

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MFA required for electronic filing

Effective May 3rd, the 2017 version of UltraTax CS requires multi-factor authentication (MFA) to access the electronic filing transmission feature in CS Connect.

Thomson Reuters is committed to proactively evolving our security features to help you protect your firm and your clients' data. For more information about multi-factor authentication, see Multi-factor authentication overview.

To calculate Schedules M-1 and M-2 for C Corporations or Cooperative Associations and Schedule M-1 for S Corporations if total receipts for the year and year-end assets are less than $250,000, follow this procedure. If you do not follow the procedure, UltraTax CS does not calculate Schedules M-1 and M-2 for C Corporations if receipts and assets are less than $250,000.

  1. Choose Setup > 1120 Corporation.
  2. In the Federal tab, click the Other Return Options button.
  3. In the Return Presentation tab, mark the Complete Schedule M-1 and C Corporation Schedule M-2 when receipts and assets are less than $250,000 checkbox.

Notes

  • This option applies to all 1120 clients; however, the threshold for 1120-F, 1120-PC, and 1120-REIT filers is $25,000 instead of $250,000.
  • Schedule M-1 is also not completed for C Corporations, S Corporations, Cooperative Associations, Foreign Corporations, or Property and Casualty Insurance Companies when total assets are $10 million or greater and Schedule M-3 is required in lieu of Schedule M-1.
  • S Corporations with accumulated E&P must maintain the accumulated adjustments account (AAA) to determine the tax effect of distributions made by the S Corporation. An S Corporation without accumulated E&P is not required to maintain the AAA, but Form 1120S instructions recommend that all S Corporations maintain the AAA. If the S Corporation is not required to maintain the AAA and you want to suppress the printing of the S Corporation Schedule M-2, mark the Suppress printing of Schedule M-2 field in Screen Ms in the Balance Sheet folder.
  • To set this option on a client-by-client basis for C Corporations or Cooperative Associations, mark the Complete Schedules M-1 and M-2 when not required field in Screen Mc. The field in Screen Mc is not available to mark if the respective checkbox in the Setup > 1120 Corporation > Federal tab > Other Return Options > Return Presentation tab is marked.
  • To set this option on a client-by-client basis for S Corporations, mark the Complete Schedule M-1 when not required field in Screen Ms. The field in Screen Ms is not available to mark if the respective checkbox in the Setup > 1120 Corporation > Federal tab > Other Return Options > Return Presentation tab is marked.

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