Form Schedule M-3 (1120 Schedule M-3 (1120 Net Income (Loss) Reconciliation for S Corporations With

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
SCHEDULE M-3 (FORM 1120S), PAGE 1 of 4
MARGINS: TOP 13mm (1⁄ 2 ") CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

SCHEDULE M-3
(Form 1120S)
Department of the Treasury
Internal Revenue Service

Name of corporation

Part I

Action

Date

Signature

O.K. to print
Revised proofs
requested

Net Income (Loss) Reconciliation for S Corporations
With Total Assets of $10 Million or More

OMB No. 1545-0123

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2006

©

©

Attach to Form 1120S.
See separate instructions.

Employer identification number

Financial Information and Net Income (Loss) Reconciliation

1a Did the corporation prepare a certified audited income statement for the period ending with or within this taxable year?
Yes. Skip line 1b and complete lines 2 through 11 with respect to that income statement.
No. Go to line 1b.
b Did the corporation prepare an 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 corporation’s net income (loss) per its books and records on line 4.
/
/
/
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2 Enter the income statement period: Beginning
Ending
3a Has the corporation’s income statement been restated for the income statement period on line 2?
Yes. (If “Yes,” attach an explanation and the amount of each item restated.)
No.
3b Has the corporation’s income statement been restated for any of the five income statement periods preceding the period on
line 2?
Yes. (If “Yes,” attach an explanation and the amount of each item restated.)
No.
4

Worldwide consolidated net income (loss) from income statement source identified in Part I, line 1

5a (

5a Net income from nonincludible foreign entities (attach schedule)

6a (

6a Net income from nonincludible U.S. entities (attach schedule)

7a

7a Net income of other includible entities (attach schedule)

7b (

b Net loss of other includible entities (attach schedule)
Adjustment to eliminations of transactions between includible entities and nonincludible entities
(attach schedule)

8

Adjustment to reconcile income statement period to tax year (attach schedule)

9

10

Other adjustments to reconcile to amount on line 11 (attach schedule)

10

11

Net income (loss) per income statement of the corporation. Combine lines 4 through 10

For Privacy Act and Paperwork Reduction Act Notice,
see the Instructions for Form 1120S.

)

6b

b Net loss from nonincludible U.S. entities (attach schedule and enter as a positive amount)

9

)

5b

b Net loss from nonincludible foreign entities (attach schedule and enter as a positive amount)

8

4

Cat. No. 39666W

)

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Schedule M-3 (Form 1120S) 2006

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
SCHEDULE M-3 (FORM 1120S), PAGE 2 of 4
MARGINS: TOP 13mm (1⁄ 2 ") CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page

Schedule M-3 (Form 1120S) 2006
Name of corporation

Part II

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Reconciliation of Net Income (Loss) per Income Statement of the Corporation With Total Income
(Loss) per Return
Income (Loss) Items

1

2

Employer identification number

(a)
Income (Loss) per
Income Statement
(optional)

(b)
Temporary
Difference

(c)
Permanent
Difference

(d)
Income (Loss) per
Tax Return
(optional)

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 not eliminated in tax consolidation
Income (loss) from U.S. partnerships (attach
schedule)
Income (loss) from foreign partnerships (attach
schedule)
Income (loss) from other pass-through entities
(attach schedule)
Items relating to reportable transactions (attach
details)
Interest income
Total accrual to cash adjustment
Hedging transactions
Mark-to-market income (loss)
Cost of goods sold (attach Form 8916-A)
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

21a 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 details)
g Other gain/loss on disposition of assets other than
inventory
22 Other income (loss) items with differences (attach
schedule)
23 Total income (loss) items. Combine lines 1
through 22
24 Total expense/deduction items (from Part III,
line 30)
25 Other items with no differences
26 Reconciliation totals. Combine lines 23 through 25
Note. Line 26, column (a), must equal the amount on Part I, line 11, and column (d) must equal Form 1120S, Schedule K, line 18.
Schedule M-3 (Form 1120S) 2006

10
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
SCHEDULE M-3 (FORM 1120S), PAGE 3 of 4 (Page 4 is Blank)
MARGINS: TOP 13mm (1⁄ 2 ") CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page

Schedule M-3 (Form 1120S) 2006
Name of corporation

Part III

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

1
2
3
4
5

3

Employer identification number

(a)
Expense per
Income Statement
(optional)

(b)
Temporary
Difference

(c)
Permanent
Difference

(d)
Deduction per
Tax Return
(optional)

U.S. current income tax expense
U.S. deferred income tax expense
State and local current income tax expense
State and local deferred income tax expense
Foreign current income tax expense (other than
foreign withholding taxes)
6 Foreign deferred income tax expense
7 Equity-based compensation
8 Meals and entertainment
9 Fines and penalties
10 Judgments, damages, awards, and similar costs
11 Pension and profit-sharing
12 Other post-retirement benefits
13 Deferred compensation
14 Charitable contribution of cash and tangible
property
15 Charitable contribution of intangible property
16 Current year acquisition or reorganization
investment banking fees
17 Current year acquisition or reorganization legal and
accounting fees
18 Current year acquisition/reorganization other costs
19 Amortization/impairment of goodwill
20 Amortization of acquisition, reorganization, and
start-up costs
21 Other amortization or impairment write-offs
22 Section 198 environmental remediation costs
23a Depletion—Oil & Gas
b Depletion—Other than Oil & Gas
24 Depreciation
25 Bad debt expense
26 Interest expense
27 Corporate owned life insurance premiums
28 Purchase versus lease (for purchasers and/or
lessees)
29 Other expense/deduction items with differences
(attach schedule)
30 Total expense/deduction items. Combine lines 1
through 29. Enter here and on Part II, line 24

Schedule M-3 (Form 1120S) 2006