1120 Schedule M-3 Net Income (Loss) reconciliation for Corporations with T

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SCHEDULE M-3
(Form 1120)

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

Department of the Treasury
Internal Revenue Service

▶

Part I
1a

2018

▶ Attach to Form 1120 or 1120-C.
Go to www.irs.gov/Form1120 for instructions and the latest information.

Employer identification number

Name of corporation (common parent, if consolidated return)

Check applicable box(es):

OMB No. 1545-0123

(1)

Non-consolidated return

(2)

Consolidated return (Form 1120 only)

(3)

Mixed 1120/L/PC group

(4)

Dormant subsidiaries schedule attached

DRAFT AS OF
August 14, 2018
DO NOT FILE
Financial Information and Net Income (Loss) Reconciliation (see instructions)

Did the corporation 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 2a 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.
b Did the corporation prepare a certified audited non-tax-basis income statement for that period?
Yes. Skip line 1c and complete lines 2a through 11 with respect to that income statement.
No. Go to line 1c.
c Did the corporation prepare a non-tax-basis income statement for that period?
Yes. Complete lines 2a through 11 with respect to that income statement.
No. Skip lines 2a through 3c and enter the corporation’s net income (loss) per its books and records on line 4a.
MM/DD/YYYY
Ending
MM/DD/YYYY
2a Enter the income statement period: Beginning
b Has the corporation’s income statement been restated for the income statement period on line 2a?
Yes. (If “Yes,” attach an explanation and the amount of each item restated.)
No.

c

Has the corporation’s income statement been restated for any of the five income statement periods immediately
preceding the period on line 2a?
Yes. (If “Yes,” attach an explanation and the amount of each item restated.)
No.

3a

Is any of the corporation’s voting common stock publicly traded?
Yes.

No. If “No,” go to line 4a.
b Enter the symbol of the corporation’s primary U.S. publicly traded voting common
stock . . . . . . . . . . . . . . . . . . . . . . . . . .
c Enter the nine-digit CUSIP number of the corporation’s primary publicly traded voting
common stock . . . . . . . . . . . . . . . . . . . . . . .

4a Worldwide consolidated net income (loss) from income statement source identified in Part I, line 1 .
b Indicate accounting standard used for line 4a (see instructions):
(1)
GAAP
(2)
IFRS (3)
Statutory (4)
Tax-basis (5)
Other (specify)
5a Net income from nonincludible foreign entities (attach statement) . . . . . . . . . . . .
b Net loss from nonincludible foreign entities (attach statement and enter as a positive amount) . . .
6a Net income from nonincludible U.S. entities (attach statement) . . . . . . . . . . . . .
b Net loss from nonincludible U.S. entities (attach statement and enter as a positive amount) . . . .
7a Net income (loss) of other includible foreign disregarded entities (attach statement) . . . . . .
b Net income (loss) of other includible U.S. disregarded entities (attach statement) . . . . . . .
c Net income (loss) of other includible entities (attach statement) . . . . . . . . . . . . .
Adjustment to eliminations of transactions between includible entities and nonincludible entities (attach
8
statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
10a
b
c
11
12

5a (
5b
6a (
6b
7a
7b
7c

)
)

8
9
Adjustment to reconcile income statement period to tax year (attach statement) . . . . . . .
Intercompany dividend adjustments to reconcile to line 11 (attach statement) . . . . . . . .
10a
Other statutory accounting adjustments to reconcile to line 11 (attach statement) . . . . . . .
10b
10c
Other adjustments to reconcile to amount on line 11 (attach statement) . . . . . . . . . .
Net income (loss) per income statement of includible corporations. Combine lines 4 through 10 .
11
Note: Part I, line 11, must equal Part II, line 30, column (a), or Schedule M-1, line 1 (see instructions).
Enter the total amount (not just the corporation’s share) of the assets and liabilities of all entities included or removed on the
following lines.
Total Assets

a
b
c
d

4a

Included on Part I, line 4
Removed on Part I, line 5
Removed on Part I, line 6
Included on Part I, line 7

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Total Liabilities

▶
▶
▶
▶

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

Cat. No. 37961C

Schedule M-3 (Form 1120) 2018

Page 2

Schedule M-3 (Form 1120) 2018

Employer identification number

Name of corporation (common parent, if consolidated return)
Check applicable box(es): (1)
Check if a sub-consolidated: (6)

Consolidated group
1120 group

(7)

(2)

(3)

Parent corp

Consolidated eliminations

(4)

(5)

Mixed 1120/L/PC group

Employer identification number

Name of subsidiary (if consolidated return)

Part II

Subsidiary corp

1120 eliminations

DRAFT AS OF
August 14, 2018
DO NOT FILE

Reconciliation of Net Income (Loss) per Income Statement of Includible Corporations With Taxable
Income per Return (see instructions)
(a)
Income (Loss) per
Income Statement

Income (Loss) Items

(Attach statements for lines 1 through 12)
1 Income (loss) from equity method foreign corporations
2 Gross foreign dividends not previously taxed . . .
3 Subpart F, QEF, and similar income inclusions . .
4 Gross-up for foreign taxes deemed paid . . . .
5 Gross foreign distributions previously taxed . . .
6 Income (loss) from equity method U.S. corporations
7 U.S. dividends not eliminated in tax consolidation .
8 Minority interest for includible corporations . . .
9 Income (loss) from U.S. partnerships . . . . .
10 Income (loss) from foreign partnerships . . . .
11 Income (loss) from other pass-through entities . .
12 Items relating to reportable transactions . . . .
13 Interest income (see instructions)
. . . . . .
14 Total accrual to cash adjustment . . . . . . .
15 Hedging transactions . . . . . . . . . .
16 Mark-to-market income (loss) . . . . . . . .
17 Cost of goods sold (see instructions) . . . . .
18 Sale versus lease (for sellers and/or lessors) . . .
19 Section 481(a) adjustments . . . . . . . .
20 Unearned/deferred revenue . . . . . . . .
21 Income recognition from long-term contracts
. .
22 Original issue discount and other imputed interest .
23a 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 . . . . .

(

(b)
Temporary
Difference

(c)
Permanent
Difference

)

(d)
Income (Loss)
per Tax Return

(

)

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
24 Capital loss limitation and carryforward used . . .
25 Other income (loss) items with differences (attach statement)
26 Total income (loss) items. Combine lines 1 through 25
27 Total expense/deduction items (from Part III, line 39)
28 Other items with no differences . . . . . . .
29a Mixed groups, see instructions. All others, combine
lines 26 through 28 . . . . . . . . . .
b PC insurance subgroup reconciliation totals . . .
c Life insurance subgroup reconciliation totals . . .
30 Reconciliation totals. Combine lines 29a through 29c
Note: Line 30, column (a), must equal Part I, line 11, and column (d) must equal Form 1120, page 1, line 28.
Schedule M-3 (Form 1120) 2018

Page 3

Schedule M-3 (Form 1120) 2018

Employer identification number

Name of corporation (common parent, if consolidated return)
Check applicable box(es): (1)
Check if a sub-consolidated: (6)

Consolidated group
1120 group

(7)

(2)

Parent corp

(3)

Consolidated eliminations

(4)

Subsidiary corp

(5)

Mixed 1120/L/PC group

1120 eliminations
Employer identification number

Name of subsidiary (if consolidated return)

DRAFT AS OF
August 14, 2018
DO NOT FILE

Part III Reconciliation of Net Income (Loss) per Income Statement of Includible Corporations With Taxable
Income per Return—Expense/Deduction Items (see instructions)
(a)
Expense per
Income Statement

Expense/Deduction Items

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

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) . . . . . . .

.
.
.
.

(b)
Temporary
Difference

(c)
Permanent
Difference

(d)
Deduction per
Tax Return

.
.
.
.

.

Foreign deferred income tax expense . . . . .
Foreign withholding taxes . . . . . . . . .
Interest expense (see instructions) . . . . . .
Stock option expense . . . . . . . . . .
Other equity-based compensation . . . . . .
Meals and entertainment . . . . . . . . .
Fines and penalties . . . . . . . . . . .
Judgments, damages, awards, and similar costs .
Parachute payments . . . . . . . . . . .
Compensation with section 162(m) limitation . . .
Pension and profit-sharing . . . . . . . . .
Other post-retirement benefits . . . . . . .
Deferred compensation . . . . . . . . . .
Charitable contribution of cash and tangible property
Charitable contribution of intangible property
. .
Charitable contribution limitation/carryforward . .
Domestic production activities deduction (see
instructions) . . . . . . . . . . . . .
23 Current year acquisition or reorganization
investment banking fees . . . . . . . .
24 Current year acquisition or reorganization legal and
accounting fees . . . . . . . . . . .
25 Current year acquisition/reorganization other costs .
26 Amortization/impairment of goodwill . . . . .
27 Amortization of acquisition, reorganization, and
start-up costs . . . . . . . . . . . .
28
29
30
31
32
33
34
35
36
37

Other amortization or impairment write-offs . .
Reserved . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . .
Bad debt expense . . . . . . . . . .
Corporate owned life insurance premiums
. .
Purchase versus lease (for purchasers and/or lessees)
Research and development costs . . . . .
Section 118 exclusion (attach statement) . . .
Section 162(r)—FDIC premiums paid by certain
large financial institutions (see instructions) . .
38 Other expense/deduction items with differences
(attach statement)
. . . . . . . . . .

.
.
.
.
.
.
.
.
.

39 Total expense/deduction items. Combine lines 1
through 38. Enter here and on Part II, line 27,
reporting positive amounts as negative and
negative amounts as positive . . . . . . .
Schedule M-3 (Form 1120) 2018