The IRS on November 3 released new draft instructions for Form 1120S, U.S. Income Tax Return for an S Corporation, including updated information for companies that file the Schedule M-3 to reconcile their income and losses.
The IRS notice said requirements have changed for some filers of the 2014 Form 1120S that also file Schedule M-3 (Form 1120S), Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More. The changes affect S corporations with less than $50 million in total assets at the end of the tax year, as well as S corporations that aren't required to file Schedule M-3 (Form 1120S) but do so anyway.
For tax years ending on or after Dec. 31, 2014, these S corporations must either:
- complete Schedule M-3 (Form 1120S) entirely; or
- complete Schedule M-3 (Form 1120S) through Part I and complete Form 1120S, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120S).
The IRS said S corporations aren't required to file Form 8916-A, Supplemental Attachment to Schedule M-3.
The instructions offer further guidance if a corporation chooses to complete Form 1120S, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120S).
For these taxpayers, Line 1 of Form 1120S, Schedule M-1 must equal Line 11 of Part I of Schedule M-3 (Form 1120S). In addition, the IRS said, any corporation that completes Parts II and III of Schedule M-3 (Form 1120S) must complete all columns, without exception. Taxpayers filing Schedule M-3 must check the "Check if Sch. M-3 attached" box.
The draft instructions are available here.
The IRS on November 3 released new draft instructions for Form 1120S, U.S. Income Tax Return for an S Corporation, including updated information for companies that file the Schedule M-3 to reconcile their income and losses.
The IRS notice said requirements have changed for some filers of the 2014 Form 1120S that also file Schedule M-3 (Form 1120S), Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More. The changes affect S corporations with less than $50 million in total assets at the end of the tax year, as well as S corporations that aren't required to file Schedule M-3 (Form 1120S) but do so anyway.
For tax years ending on or after Dec. 31, 2014, these S corporations must either:
- complete Schedule M-3 (Form 1120S) entirely; or
- ?complete Schedule M-3 (Form 1120S) through Part I and complete Form 1120S, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120S).
The IRS said S corporations aren't required to file Form 8916-A, Supplemental Attachment to Schedule M-3.
The instructions offer further guidance if a corporation chooses to complete Form 1120S, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120S).
For these taxpayers, Line 1 of Form 1120S, Schedule M-1 must equal Line 11 of Part I of Schedule M-3 (Form 1120S). In addition, the IRS said, any corporation that completes Parts II and III of Schedule M-3 (Form 1120S) must complete all columns, without exception. Taxpayers filing Schedule M-3 must check the "Check if Sch. M-3 attached" box.
The draft instructions are available here.
The IRS on November 3 released new draft instructions for Form 1120S, U.S. Income Tax Return for an S Corporation, including updated information for companies that file the Schedule M-3 to reconcile their income and losses.
The IRS notice said requirements have changed for some filers of the 2014 Form 1120S that also file Schedule M-3 (Form 1120S), Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More. The changes affect S corporations with less than $50 million in total assets at the end of the tax year, as well as S corporations that aren't required to file Schedule M-3 (Form 1120S) but do so anyway.
For tax years ending on or after Dec. 31, 2014, these S corporations must either:
- complete Schedule M-3 (Form 1120S) entirely; or
- ?complete Schedule M-3 (Form 1120S) through Part I and complete Form 1120S, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120S).
The IRS said S corporations aren't required to file Form 8916-A, Supplemental Attachment to Schedule M-3.
The instructions offer further guidance if a corporation chooses to complete Form 1120S, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120S).
For these taxpayers, Line 1 of Form 1120S, Schedule M-1 must equal Line 11 of Part I of Schedule M-3 (Form 1120S). In addition, the IRS said, any corporation that completes Parts II and III of Schedule M-3 (Form 1120S) must complete all columns, without exception. Taxpayers filing Schedule M-3 must check the "Check if Sch. M-3 attached" box.
The draft instructions are available here.
