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Screen CAM1M2 - California Schedules M-1 and M-2 (1065)
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Reconciliation of Income (Loss) per Books
UltraTax CS uses information in this section to complete Form 565, Schedule M-1 on Page 5 and Form 568, Schedule M-1 on Page 6.
Items that are calculated and transferred to California Schedule M-1 are as follows:
- Guaranteed payments
- The 50 percent (20 percent for DOT) reduction in meals and entertainment expenses from the Inc, CAF2, CAFR2, and CARent screens
- Limited partnership tax (LLC annual tax)
- Foreign taxes paid
- Disallowed conservation expense from the CAF2 and CAFR2 screens
- Differences between book and California depreciation
- Differences between book and California amortization
- Differences between book and California Schedule D-1 gain / loss
- Tax-exempt interest and other tax exempt income
- Differences between federal and California distributive income
Net income per books (Force)
UltraTax CS transfers federal net income per books from Form 1065, Page 5, Schedule M-1, line 1 to Form 565, Page 5 and Form 568, Page 6, Schedule M-1, line 1. To change the amount, enter the revised amount.
Taxable income not on books
Relevant data transfers from the federal M1M2 screens to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.Book expenses not deducted on tax return
Relevant data transfers from the federal M1M2 and K1-5 screens to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.To include or exclude federal amounts for California purposes, enter the code from the list of available options.
Code | Description | Destination |
|---|---|---|
I | Include (default) | Transfers to Form 565, Page 4, Schedule K, line 18c and Page 5, Schedule M-1, line 4 (Form 568, Page 5, Schedule K, line 18c and Page 5, Schedule M-1, line 4) |
X | Exclude | Transfers to Form 565, Page 5, Schedule M-1, line 4 only (Form 568, Page 5, Schedule M-1, line 4 only) |
Tax credit adjustment not on books
Enter any tax credit adjustments that weren't reported on the books. Information in this statement is added to the statement on Form 565, Page 5/Form 568, Page 6 Schedule M-1, line 4.
Book income not included on tax return
Relevant data transfers from the federal M1M2 and K1-5 screens to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.To include or exclude federal amounts for California purposes, enter the code from the following list of available options.
Code | Description | Destination |
|---|---|---|
I | Include (default) | Transfers to Form 565, Page 4, Schedule K, line 18b and Page 5, Schedule M-1, line 6 (Form 568, Page 5, Schedule K, line 18b and Page 6, Schedule M-1, line 6) |
X | Exclude | Transfers to Form 565, Page 5, Schedule M-1, line 6 only (Form 568, Page 6, Schedule M-1, line 6 only) |
Return deductions not on books
Relevant data transfers from the federal M1M2 screen to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.Schedule K California adjustment (Force)
UltraTax CS calculates the Schedule K California adjustment as the difference between federal and California distributive income. Enter an amount, including
0
(zero), to override the calculated amount. The adjustment transfers to Schedule M-1, line 2 or 6.Schedule M-1 rounding difference
Select
Ptr Alloc
to specially allocate the Schedule M-1 rounding difference to the partners using ratios different from the profit-sharing percentages.Depreciation - book / … / Schedule D-1 gain or loss - book
UltraTax CS transfers the book amounts from the federal M1M2 screen to the respective California Schedule M-1 boxes.
If the California amounts are entered in detailed asset data entry or in the CADepr screen, then the California amounts are used to calculate the book / tax differences. Refer to the CADepr screen for information on depreciation and amortization at the California level.
If tax depreciation and amortization aren't entered, UltraTax CS places the book depreciation plus amortization amount on Form 565, Page 1, line 17 / Form 568, Page 4, Schedule B, line 17 and does not make reconciling adjustments. Likewise, if values are entered for tax depreciation and amortization but book depreciation and amortization are blank, UltraTax CS assumes that they are the same and does not make the adjustments. UltraTax CS makes automatic adjustments only when values entered for tax and book depreciation and amortization are different.
Maximum amount for Schedule M-1 rounding
Enter an out-of-balance threshold, or enter
0
(zero) if you do not want any automatic adjustment to be made. UltraTax CS will perform an out-of-balance adjustment up to the amount specified. If left blank, UltraTax CS defaults to the amount entered in the Maximum amount for Schedule M-1 rounding
box in the federal M1M2 screen.If the difference between Schedule K, Distributive income / payment items and Schedule M-1, line 9 is less than the out-of-balance threshold, UltraTax CS will automatically adjust the M-1, line 4 or 7 to correct the out-of-balance condition. However, UltraTax CS won't perform any adjustment if Schedule M-1 is out of balance by more than the out-of-balance threshold.
Analysis of Partners' Capital Accounts
Capital account - beginning of year
UltraTax CS transfers relevant data of prior-year ending capital to Schedule M-2, line 1. Select
Ptr Alloc
to allocate the current year’s beginning capital on an absolute dollar basis to the partners.Capital contributions: Cash / Property
Relevant data transfers from the federal M1M2 screen to Schedule M-2, line 2. To change the federal amounts for California purposes, enter the revised amounts in these boxes.
Other increases
Relevant data transfers from the federal M1M2 screen to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.Cash distributions
Relevant data transfers from the federal M1M2 screen to Schedule M-2, line 6a. To change the federal amounts for California purposes, enter the revised amount.
Property distributions
Relevant data transfers from the federal M1M2 screen to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.Distributions subject to section 737
Relevant data transfers from the federal M1M2 screen to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.Other decreases
Relevant data transfers from the federal M1M2 screen to this statement. To exclude an item from the state return, delete the amount, enter
0
(zero), or delete the entire line item from the statement. UltraTax CS displays the modified column in black and won't overwrite the new data with subsequent federal-to-state data transfers.