Schedule M-1 or M-3 book / tax difference FAQ (1065)

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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.

The following includes an answer to a common question about Schedule M-1 or M-3 book / tax difference.

Question

How is the Schedule M-1 or M-3 book / tax depreciation difference calculated?

Answer

UltraTax CS uses information in Screen M1M2 in the Balance Sheet folder to calculate book / tax depreciation differences.

The Depreciation - book fields in the first column display the amount of book depreciation transferred from the asset module. To use an amount for book depreciation that is different from the amounts displayed in the first column, enter an amount (including zero) in the second Depreciation - book column. UltraTax CS calculates the book / tax difference by subtracting the depreciation in these fields from tax depreciation.

If the Depreciation - book fields in both columns are blank or if book depreciation equals tax depreciation, UltraTax CS does not generate a Schedule M-1 or M-3 depreciation adjustment.

Note: If an asset contains a Book column, UltraTax CS assumes book depreciation has been entered for all assets. Therefore, a blank Book column assumes that asset's book depreciation is zero and not equal to the tax depreciation. If desired, you can create or clear a Book column for all assets at one time. See Setting up treatments.

Related topic: 1065 Frequently asked questions

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