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Screen M3-3 - Schedule M-3 - Expense and Deduction Items (1065)

Expense and Deduction Items

Use this section to enter expense and deduction items from the partnership's income statement and the temporary and permanent difference for each item.
The application automatically transfers book and tax amounts and calculates the necessary temporary or permanent difference for the following items on Schedule M-3, Part III.
  • Foreign current income tax expense, excluding amount from passthrough entities
  • Meals expenses from all activities
  • Guaranteed payments from all activities
  • Pension and profit-sharing from all activities
  • Charitable contributions of cash and tangible property, excluding amounts from passthrough entities
  • Other amortization or impairment write-offs from all activities (from the
    Amortization - book
     field in the M1M2 Screen.)
  • Depletion - other than oil and gas
  • Intangible drilling and development costs, excluding amounts from passthrough entities
  • Depreciation from activities other than cost of goods sold (from the
    Depreciation / Section 179 - book
     fields in the M1M2 Screen.)
  • Bad debt expense
  • Nondeductible portion of conservation expenses from the F-2 and 4835-2 Screens
  • Tax credit adjustment for Forms 5884, 6765, 8820, 8826, 8846, 8881, 8882, 8932, 8941, and 8994
Report in column (a) the amount of expense included on Schedule M-3, Page 1, line 11 for each item on Schedule M-3, Part III. Enter these amounts in the Expense per Income Statement column. For any item of expense where there is a difference between the income statement and the tax return amount, enter the temporary portion in the Temporary Difference column and the permanent portion in the Permanent Difference column. UltraTax CS completes column (d) based on your entry in these fields.
Fields with an asterisk before the description default to application-calculated amounts based on current return information. To override the calculated amount, enter an amount, including 0 (zero), in the appropriate field.
Use the statement to enter other expense or deduction items that have a difference between the book and tax amount and that are not included on any other line on Schedule M-3.
The application adds the items entered in the statement to the following items in the printed statement.
  • Nondeductible portion of conservation expenses from the F-2 and 4835-2 Screens
  • Tax credit adjustment for Forms 5884, 6765, 8820, 8826, 8846, 8881, 8882, 8932, 8941, and 8994
Enter expenses included on the books that would have been subject to the 2% floor under pre-TCJA tax law. The application includes this amount on Schedule M-3, Page 3, line 30.
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