Enter information for Schedule M-3
- Complete Schedule M-3.
- Open screensM3,M3-2, andM3-3located in theBalance Sheetfolder.
- Use the information in these screens to complete Schedule M-3.
- Identify the nature of the difference for each account and determine whether it's a temporary or permanent difference.
- Enter each account based on the adjusting entry made in the taxpayer's books.
- Enter the book amounts for calculation.
- Go to theM1M2screen in theBalance Sheetfolder.
- Enter the book amounts for depreciation, section 179 expense, amortization, and Form 4797 gain or loss.
- UsePtr Allocin theM3-2andM3-3screens to allocate these amounts to partners when using a ratio other than profit percentages.noteUltraTax CS ignores all other data entered in the Reconciliation of Income (Loss) per Books section in theM1M2screen when completing Schedule M-3, Part II and Part III.
- Complete Form 8916-A.
- Go to the8916Ascreen in theBalance Sheetfolder.
- Fill out Form 8916-A as needed.noteUltraTax 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
- Enter book amounts and change M-3 Statement Detail for Passthrough Entities.
- Go to screensK1,K1-2,K1-5, andk1-6in theK1 1065,1041folder.
- Enter the book amounts and make any necessary changes to the M-3 statement detail for each passthrough entity.noteUltraTax 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.
- UsePtr Allocin screenM3-2to allocate these amounts to partners using a ratio other than profit percentages.
