1065-US: Automatic calculations for Schedule M-3 (FAQ)

Show expandable text

New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

Does UltraTax CS perform any automatic calculations for Schedule M-3?

Answer

UltraTax/1065 automatically transfers book and tax amounts and calculates the necessary temporary or permanent difference for the following items on Schedule M-3.

  • Income (loss) from U.S. partnerships
  • Income (loss) from foreign partnerships
  • Income (loss) from other passthrough entities
  • Income statement gain / loss on sale of assets other than inventory, excluding amounts from passthrough entities
  • Gross capital gains from Schedule D, excluding amounts from passthrough entities
  • Gross capital losses from Schedule D, excluding amounts from passthrough entities
  • Net gain / loss reported on Form 4797, line 17
  • Other gain / loss on disposition of assets other than inventory, excluding amounts from passthrough entities
  • Foreign current income tax expense, excluding amounts from passthrough entities
  • Meal expenses from all activities
  • Guaranteed payments from all activities
  • Pension and profit-sharing, excluding amounts from passthrough activities
  • Charitable contributions of cash and tangible property, excluding amounts from passthrough entities
  • Other amortization or impairment write-offs from all activities
  • Depletion - other than oil and gas
  • Intangible drilling and development costs, excluding amounts from passthrough entities
  • Depreciation from all activities, other than Form 1125-A
  • Bad debt expense
  • Conservation expenses from Schedule F and the Farm Rental Income and Expenses Worksheet
  • Tax credit adjustment for Forms 5884, 6478, 6765, 8820, 8826, 8844, 8845, 8846, 8864, 8881, 8882, 8932, 8941, and 8994
  • Rounding adjustment, if applicable

UltraTax/1065 also automatically transfers book and tax amounts and calculates the necessary temporary or permanent difference for the following items on Form 8916-A.

  • Other section 263A costs
  • Depreciation, Form 1125-A
  • Other items with no differences
  • Tax-exempt interest income, excluding amounts from passthrough entities
  • Other interest income, excluding amounts from passthrough entities
  • Other interest expense

In addition to the automatic calculations above, if the Calculate adjustment to balance Schedule M-3 field in Screen M3 is marked and the Other items with no differences field in the applicable input screen is blank, UltraTax/1065 makes the following adjustments.

  • If the Other items with no differences field in Screen M3-2 is blank, UltraTax CS calculates the difference between the income (loss) on Form 1065, Page 5, Analysis of Income, line 1 and Schedule M-3, Part II, line 26(d) and enters an adjustment on Schedule M-3, Part II, line 25, columns (a) and (d).
  • If the Other items with no differences field on Screen 8916A is blank, UltraTax CS calculates the difference between the cost of goods sold on Form 1125-A, line 8 and Form 8916-A, Part I, line 8 and enters an adjustment on Form 8916-A, Part I, line 7, columns (a) and (d).

Due to the complexity of Schedule M-3, you must carefully review these amounts and make changes accordingly. In Screens M3-2, M3-3, and 8916A, an asterisk (*) denotes which fields have automatic calculations. To override the calculations, enter an amount, including 0 (zero), in the appropriate field.

Related topic: Schedule M-3 FAQs (1065)

Was this article helpful?

Thank you for the feedback!