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

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


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


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.

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