Corporate Tax Filing: Schedule M-3: Part II

This course covers Part II of Schedule M-3 including filing and disclosure requirements for Income (Loss) items reported on the financial statements.  Completion of Part II requires the disclosure of detailed information regarding book-tax differences when reporting income (loss) items. 

In addition to determining how financial income (loss) 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 income (loss) item must be separately disclosed, even when there is no book-tax difference.  Thus, it is important to “get the numbers right” when completing Part II of Schedule M-3.

This course covers the Schedule M-3, Part II 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 income differences

• Disclosure of financial income items even when there is no book-tax difference.

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