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This course covers Part III of Schedule M-3 including filing and disclosure requirements for Expense/Deduction items reported on the financial statements.  Completion of Part III requires the disclosure of detailed information regarding book-tax differences when reporting expense/deduction items. 

In addition to determining how financial expense/deduction items differ from how they are reported on the tax return, the differences must be reported as either a “temporary” difference or a “permanent” difference.  Also, in some cases, an expense/deduction item must be separately disclosed, even when there is no book-tax difference. 

After completing Part III, the Part II, line 30 totals must reconcile with the book income reported on Part I, line 11 and Line 28 on Form 1120.  Thus, it is important to “get the numbers right” when completing Part III of Schedule M-3.

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

  • The four column reporting format for reconciling book income to taxable income.
  • Adequate and separate disclosure requirements for book-tax differences
  • Disclosure of common book-tax expense/deduction differences
  • Disclosure of financial expense/deduction items even when there is no book-tax difference.
  • Reconciling net book income reported on part II with net income reported on part I
  • Reconciling net taxable income reported on part II with taxable income reported on form 1120.

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 I and II were covered in prior courses.   Also, the Part III line items not covered in this course will be covered in a subsequent Advanced Topics course.

A comprehensive example of Schedule M-3, Part III is provided to reinforce your knowledge of identifying and reporting expense/deduction differences and reconciling Schedule M-3 totals to both financial and taxable income.

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

  • Recognize the four column reporting format for reconciling book income to taxable income.
  • Discover how to report common book-tax expense/deduction differences.
  • Identify how to report other expense/deduction items with differences on line 37.
  • Identify how to reconcile Part II, line 30 net income (loss) with financial income reported on line 11, Part I and with taxable income reported on line 28, form 1120.
Last updated/reviewed: February 05, 2018

2 Reviews (10 ratings)Reviews

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Anonymous Author
I learned how to handle contributions! Didn't know that before!
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Done

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
INTRODUCTION AND OVERVIEW
Compliance and Reporting Issues
  12:31Overview of M3 Part II
  12:41Lines 11 - 13 Meals & Ent, Fines, Judgments,Penalties, and Lines 19-20 Charitable Contributions
  13:3421 Limits/Carry. 22 DPA Deduction. 31 Depreciation. 32 Bad Debts. 33 Corp. Owned Life Ins. 37 Other Expense Deduction
  7:5138 Total Exp Deduction. Tax Insight. Deferred Tax Asset Current/Non Current. Net Cap Loss. Deferred Tax Liability
CONCLUSION
  12:53Course Summary and Other Lines
Continuous Play
  1:01:164 Corporate Tax Filing Schedule M-3: Part III Compliance and Reporting Issues
SUPPORTING MATERIALS
  PDFSlides: Schedule M-3: Part III: Compliance and Reporting Issues
  PDFSchedule M-3: Part III: Compliance and Reporting Issues Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM