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Balance sheet

Automatic calculations for Schedule M-3 and Form 8916-A

UltraTax CS performs some automatic calculations of income statement and tax amounts. It also calculates temporary and permanent differences.
Schedule M-3 is very complex, so it's important to review the return and make changes if necessary. In the M-3 and 8916-A screens, an asterisk marks the fields with default calculations. If you want to override the calculations, enter the amounts manually. You can enter zero.
UltraTax CS automatically transfers book and tax amounts. It also calculates temporary or permanent differences for the following items on Schedule M-3:
  • Income statement gain (loss) on sale of assets, not including inventory and pass-through entities.
  • Gross capital gains from Schedule D, not including amounts from pass-through entities.
  • Gross capital losses from Schedule D, not including amounts from pass-through entities.
  • Net gain (loss) reported on Form 4797, line 17.
  • Use of capital loss carryover from earlier years (doesn't apply to S corporations.)
  • Disallowed capital loss in excess of capital gains (doesn't apply to S corporations).
  • Current U.S. ONESOURCE Income Tax expense (doesn't apply to members of a consolidated C or S corporation).
  • State and local ONESOURCE Income Tax (doesn't apply to members of a consolidated C or S corporation, or foreign corporations.)
  • Meal expenses from all activities, other than Form 1125-A.
  • Charitable contributions (doesn't apply to S corporations.)
  • Charitable contribution limit or carryforward (doesn't apply to S corporations.)
  • Extraterritorial income exclusion (doesn't apply to S corporations or foreign corporations.)
  • Depreciation from all activities except for Form 1125-A.
  • Credit for childcare facilities and services that an employer gives.
  • Credit for employer Social Security and Medicare taxes paid on certain employee tips.
  • Credit for increasing research activities.
  • Credit for small employer health insurance premiums.
  • Credit for small employer pension plan startup costs.
  • Credit to holders of tax credit bonds.
  • Disabled access credit.
  • Empowerment zone employment credit that wasn't applied to the cost of labor on Form 1125-A.
  • Energy-efficient home credit.
  • Income from the alcohol fuel credit.
  • Income from the biodiesel fuel credit.
  • Indian employment credit that wasn't applied to cost of labor on Form 1125-A.
  • Low-sulfur diesel fuel credit.
  • Orphan drug credit.
  • Work opportunity credit that wasn't applied to the cost of labor on Form 1125-A.
  • Credit for employer differential wage payments that weren't applied to cost of labor on Form 1125-A.
  • Other items with no differences.
  • Rounding adjustment, if applicable.
UltraTax CS also automatically transfers book and tax amounts and calculates necessary temporary or permanent difference for the following items on Form 8916-A:
  • Meal expenses from Form 1125-A
  • Depreciation from Form 1125-A
  • Wage reduction for employment credits allocated to cost of labor on Form 1125-A
  • Other items with no differences
If the taxable income calculated on the Reconciliation totals line in Part II, column (a) doesn't equal the taxable income of the corporation, UltraTax CS generates a critical diagnostic message for the return.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1120 Corporation
  • Subject: balance-sheet-m1-m3
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