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Enter information for Schedule M-3

  1. Complete Schedule M-3.
    1. Open screens
      M3
      ,
      M3-2
      , and
      M3-3
       located in the
      Balance Sheet
       folder.
    2. Use the information in these screens to complete Schedule M-3.
    3. Identify the nature of the difference for each account and determine whether it's a temporary or permanent difference.
    4. Enter each account based on the adjusting entry made in the taxpayer's books.
  2. Enter the book amounts for calculation.
    1. Go to the
      M1M2
       screen in the
      Balance Sheet
       folder.
    2. Enter the book amounts for depreciation, section 179 expense, amortization, and Form 4797 gain or loss.
    3. Use
      Ptr Alloc
       in the
      M3-2
       and
      M3-3
       screens to allocate these amounts to partners when using a ratio other than profit percentages.
      note
      UltraTax CS ignores all other data entered in the Reconciliation of Income (Loss) per Books section in the
      M1M2
       screen when completing Schedule M-3, Part II and Part III.
  3. Complete Form 8916-A.
    1. Go to the
      8916A
       screen in the
      Balance Sheet
       folder.
    2. Fill out Form 8916-A as needed.
      note
      UltraTax CS will automatically transfer calculated amounts from Form 8916-A to Schedule M-3 as follows:
      • Interest income
         - Schedule M-3, Part II, line 11
      • Cost of goods sold
         - Schedule M-3, Part II, line 15
      • Interest expense
         - Schedule M-3, Part III, line 27
  4. Enter book amounts and change M-3 Statement Detail for Passthrough Entities.
    1. Go to screens
      K1
      ,
      K1-2
      ,
      K1-5
      , and
      k1-6
       in the
      K1 1065
      ,
      1041
       folder.
    2. Enter the book amounts and make any necessary changes to the M-3 statement detail for each passthrough entity.
      note
      UltraTax CS will automatically transfer passthrough information to Schedule M-3, specifically on Page 2, lines 7, 8, and 9, based on the type and address of the passthrough entity.
    3. Use
      Ptr Alloc
       in screen
      M3-2
       to allocate these amounts to partners using a ratio other than profit percentages.

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