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Schedules M-1 and M-3 reconcile book income to taxable income reported on the return.  Corporations with $50 million or more of assets are required to file the more complex Schedule M-3.  This course covers Part I of Schedule M-3 including filing and disclosure requirements. 

Since the purpose of Schedule M-3 is to provide detailed information on book-tax differences, it is important to determine the financial information disclosure requirements, including the determination of “book” income versus “taxable Income.”

A comprehensive example of Schedule M-3, Part I is provided to reinforce your knowledge of the reporting and tax compliance process.

This course covers the Schedule M-3, Part I filing and reporting requirements, including:

  • Which corporations are required to complete Schedule M-3
    • which corporations are exempt from the reporting requirement
    • which corporations may file Schedule M-1 instead
  • What disclosures are required regarding the accounting method used to determine financial income.
  • How to compute the net income (loss) from the income statement used to reconcile book income to taxable income.
  • How financial income reported on Schedule M-3 is used to reconcile ending retained earnings reported on Schedule M-2.

After completing this course you will be better positioned to quickly and accurately complete Schedule M-3, a critical part of your company's corporate tax filing duties.

Note:  Parts II and III of Schedule M-3 are covered in other courses on Illumeo.

Course Series

This course is included in the following series:

7 CoursesReporting and Compliance for Book-Tax Differences

  1. Corporate Tax Filing: Schedule M-1 Disclosure of Book-Tax Differences on the Corporate Tax Return
  2. Corporate Tax Filing: Schedule M-3: Part I: Compliance and Reporting Issues
  3. Corporate Tax Filing: Schedule M-3: Part II: Compliance and Reporting Issues
  4. Corporate Tax Filing: Schedule M-3: Part III: Compliance and Reporting Issues
  5. Corporate Tax Filing: Schedule M-3: Additional Reporting in Parts II and III
  6. Corporate Tax Filing: Schedule M-3: Reporting Requirements for a Consolidated Group
  7. Corporate Tax Filing: Uncertain Tax Positions: Financial Accounting and Tax Reporting Requirements

Learning Objectives

  • Identify which entities are required to file Schedule M-3.
  • Identify the basic financial information disclosure requirements.
  • Identify how to reconcile worldwide consolidated net income, line 4 to net income of includible corporations, lines 4-11.
  • Discover how to reconcile retained earnings on Schedule M-2 using line 11, net income of includible corporations.
Last updated/reviewed: January 28, 2018

4 Reviews (25 ratings)Reviews

3
Anonymous Author
Time spent on Part I lines 1-3 could be condensed. Answer to question 3 in the Final Exam is inconsistent with the slides.
4
Member's Profile
Before you take this course, make sure you have an M-3 template so that you can better follow along!
5
Member's Profile
The course included a great deal of detail which the instructor patiently described to the student.
4
Anonymous Author
Overall, the course was worth it. Prepares for the Schedule M3, part I.

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
Schedule M-3: Part I
  14:59Why Schedule M-3?
  15:59Tax Insight, Overview, and Lines 1 - 7
  18:07Tax Insight, Examples, and Lines 7 - 12
Conclusion
  3:41Course Conclusion
Continuous Play
  55:242 Corporate Tax Filing Schedule M-3, Part I Compliance and Reporting Issues Full Video
SUPPORTING MATERIALS
  PDFSlides Schedule M-3: Part I: Compliance and Reporting Issues
  PDFSchedule M-3: Part I: Compliance and Reporting Issues Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM