Federal Net Income (Loss) Reconciliation for Certain Partnerships

Net Income (Loss) Reconciliation for Certain Partnerships
Schedule M-3 (Form 1065) (Rev. December 2021)
SCHEDULE M-3
(Form 1065)
(Rev. December 2021)
Department of the Treasury
Internal Revenue Service
Name of partnership

Net Income (Loss) Reconciliation
for Certain Partnerships

Attach to Form 1065.
▶ Go to www.irs.gov/Form1065 for instructions and the latest information.

OMB No. 1545-0123

▶

Employer identification number

This Schedule M-3 is being filed because (check all that apply):
A
The amount of the partnership’s total assets at the end of the tax year is equal to $10 million or more.
B
The amount of the partnership’s adjusted total assets for the tax year is equal to $10 million or more. If box B is checked,
enter the amount of adjusted total assets for the tax year
.
C
The amount of total receipts for the tax year is equal to $35 million or more. If box C is checked, enter the total receipts for
the tax year
.
D
An entity that is a reportable entity partner with respect to the partnership owns or is deemed to own an interest of 50% or
more in the partnership’s capital, profit, or loss on any day during the tax year of the partnership.
Name of Reportable Entity Partner

E

Identifying Number

Maximum Percentage Owned or
Deemed Owned

Voluntary filer.

Part I
1a

b

c

2
3a

b

4a
b

5a
b
6a
b
7a
b
8
9
10
11

12
a
b
c
d

Financial Information and Net Income (Loss) Reconciliation

Did the partnership file SEC Form 10-K for its income statement period ending with or within this tax year?
Yes. Skip lines 1b and 1c and complete lines 2 through 11 with respect to that SEC Form 10-K.
No. Go to line 1b. See instructions if multiple non-tax-basis income statements are prepared.
Did the partnership prepare a certified audited non-tax-basis income statement for that period?
Yes. Skip line 1c and complete lines 2 through 11 with respect to that income statement.
No. Go to line 1c.
Did the partnership prepare a non-tax-basis income statement for that period?
Yes. Complete lines 2 through 11 with respect to that income statement.
No. Skip lines 2 through 3b and enter the partnership’s net income (loss) per its books and records on line 4a.
/
/
Ending
/
/
Enter the income statement period: Beginning
Has the partnership’s income statement been restated for the income statement period on line 2?
Yes. (If “Yes,” attach a statement and the amount of each item restated.)
No.
Has the partnership’s income statement been restated for any of the 5 income statement periods immediately preceding the period
on line 2?
Yes. (If “Yes,” attach a statement and the amount of each item restated.)
No.
Worldwide consolidated net income (loss) from income statement source identified on Part I, line 1 .
4a
Indicate accounting standard used for line 4a. See instructions.
1
GAAP
2
IFRS
3
Section 704(b)
4
Tax-basis
5
Other (specify) ▶
Net income from nonincludible foreign entities (attach statement) . . . . . . . . . . . .
5a (
)
Net loss from nonincludible foreign entities (attach statement and enter as a positive amount) . . .
5b
Net income from nonincludible U.S. entities (attach statement) . . . . . . . . . . . . .
6a (
)
Net loss from nonincludible U.S. entities (attach statement and enter as a positive amount) . . . .
6b
Net income (loss) of other foreign disregarded entities (attach statement) . . . . . . . . . .
7a
Net income (loss) of other U.S. disregarded entities (attach statement) . . . . . . . . . . .
7b
Adjustment to eliminations of transactions between includible entities and nonincludible entities
(attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Adjustment to reconcile income statement period to tax year (attach statement) . . . . . . .
9
Other adjustments to reconcile to amount on line 11 (attach statement) . . . . . . . . . .
10
Net income (loss) per income statement of the partnership. Combine lines 4a through 10 . . .
11
Note: Part I, line 11, must equal Part II, line 26, column (a); or Form 1065, Schedule M-1, line 1. See
instructions.
Enter the total amount (not just the partnership’s share) of the assets and liabilities of all entities included or removed on the following lines.
Total Assets
Total Liabilities
Included on Part I, line 4
Removed on Part I, line 5
Removed on Part I, line 6
Included on Part I, line 7

For Paperwork Reduction Act Notice, see the instructions for your return.

Cat. No. 39669D

Schedule M-3 (Form 1065) (Rev. 12-2021)

Schedule M-3 (Form 1065) (Rev. 12-2021)

Page

Part II

Reconciliation of Net Income (Loss) per Income Statement of Partnership With Income (Loss) per
Return
Income (Loss) Items

Attach statements for lines 1 through 10.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21a

2

Employer identification number

Name of partnership

(a)
Income (Loss) per
Income Statement

(b)
Temporary
Difference

(c)
Permanent
Difference

(d)
Income (Loss) per
Tax Return

Income (loss) from equity method foreign corporations

Gross foreign dividends not previously taxed . . .
Subpart F, QEF, and similar income inclusions
. .
Gross foreign distributions previously taxed . . .
Income (loss) from equity method U.S. corporations
U.S. dividends . . . . . . . . . . . . .
Income (loss) from U.S. partnerships . . . . . .
Income (loss) from foreign partnerships . . . . .
Income (loss) from other pass-through entities
. .
Items relating to reportable transactions . . . . .
Interest income (see instructions) . . . . . . .
Total accrual to cash adjustment . . . . . . .
Hedging transactions . . . . . . . . . . .
Mark-to-market income (loss) . . . . . . . .
Cost of goods sold (see instructions) . . . . . . (
Sale versus lease (for sellers and/or lessors) . . .
Section 481(a) adjustments . . . . . . . . .
Unearned/deferred revenue . . . . . . . . .
Income recognition from long-term contracts . . .
Original issue discount and other imputed interest .
Income statement gain/loss on sale, exchange,
abandonment, worthlessness, or other disposition of
assets other than inventory and pass-through entities

)

(

)

b Gross capital gains from Schedule D, excluding
amounts from pass-through entities . . . . . .
c Gross capital losses from Schedule D, excluding
amounts from pass-through entities, abandonment
losses, and worthless stock losses . . . . . .
d Net gain/loss reported on Form 4797, line 17,
excluding amounts from pass-through entities,
abandonment losses, and worthless stock losses .
e Abandonment losses . . . . . . . . . . .
f Worthless stock losses (attach statement) . . . .
g Other gain/loss on disposition of assets other than
inventory . . . . . . . . . . . . . . .
22
Other income (loss) items with differences (attach
statement) . . . . . . . . . . . . . .
23
Total income (loss) items. Combine lines 1 through
22 . . . . . . . . . . . . . . . . .
24
Total expense/deduction items. (From Part III, line
31) (see instructions) . . . . . . . . . . .
25
Other items with no differences
. . . . . . .
26
Reconciliation totals. Combine lines 23 through 25
Note: Line 26, column (a), must equal Part I, line 11, and column (d) must equal Form 1065, Analysis of Net Income (Loss), line 1.
Schedule M-3 (Form 1065) (Rev. 12-2021)

Schedule M-3 (Form 1065) (Rev. 12-2021)

Page

Part III

3

Employer identification number

Name of partnership

Reconciliation of Net Income (Loss) per Income Statement of Partnership With Income (Loss) per
Return—Expense/Deduction Items
Expense/Deduction Items

(a)
Expense per
Income Statement

(b)
Temporary
Difference

(c)
Permanent
Difference

(d)
Deduction per
Tax Return

1
2
3

State and local current income tax expense . . .
State and local deferred income tax expense . . .
Foreign current income tax expense (other than
foreign withholding taxes) . . . . . . . . .
4
Foreign deferred income tax expense . . . . .
5
Equity-based compensation
. . . . . . . .
6
Meals and entertainment . . . . . . . . . .
7
Fines and penalties . . . . . . . . . . .
8
Judgments, damages, awards, and similar costs . .
9
Guaranteed payments
. . . . . . . . . .
10
Pension and profit-sharing . . . . . . . . .
11
Other post-retirement benefits . . . . . . . .
12
Deferred compensation . . . . . . . . . .
13
Charitable contribution of cash and tangible property
14
Charitable contribution of intangible property . . .
15
Organizational expenses as per Regulations section
1.709-2(a) . . . . . . . . . . . . . . .
16
Syndication expenses as per Regulations section
1.709-2(b)
. . . . . . . . . . . . . .
17
Current year acquisition/reorganization investment
banking fees . . . . . . . . . . . . . .
18
Current year acquisition/reorganization legal and
accounting fees . . . . . . . . . . . . .
19
Amortization/impairment of goodwill . . . . . .
20
Amortization of acquisition, reorganization, and startup costs . . . . . . . . . . . . . . .
21
Other amortization or impairment write-offs
. . .
22
Reserved for future use . . . . . . . . . .
23a Depletion—oil & gas . . . . . . . . . . .
b Depletion—other than oil & gas
. . . . . . .
24
Intangible drilling and development costs (IDC) . .
25
Depreciation . . . . . . . . . . . . . .
26
Bad debt expense . . . . . . . . . . . .
27
Interest expense (see instructions)
. . . . . .
28
Purchase versus lease (for purchasers and/or lessees)
29
Research and development costs . . . . . . .
30
Other expense/deduction items with differences
(attach statement) . . . . . . . . . . . .
31

Total expense/deduction items. Combine lines 1
through 30. Enter here and on Part II, line 24,
reporting positive amounts as negative and negative
amounts as positive . . . . . . . . . . .
Schedule M-3 (Form 1065) (Rev. 12-2021)