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Suggested Diagnostics for Form 1120 Schedule M-3 – Apply Prior to e-file Submission

The answer to each test question in general should be “yes” or “true.”
The diagnostics are listed in an approximate order of importance.
The diagnostics assume that all Parts II and III column (a) and column (d) amounts are required of the taxpayer for the current tax year.
Form 8916-A is required if the taxpayer reports cost of goods sold, interest income, or interest expense.
Form 8916 is required if the taxpayer is a mixed group, that is, has a subsidiary that is a life insurance company or a property and casualty insurance company.

(1) Unconsolidated Schedule M-3

Tests are on the unconsolidated Schedule M-3, Parts I, II, and III.

 1

Is Part II line 30 column (a) an amount other than zero?

 2

Is the sum of Part II line 30 columns (a) plus (b) plus (c) equal to column (d)?

 3

Is Part III line 36 column (a) an amount other than zero?

 4

Is the sum of Part III line 36 columns (a) plus (b) plus (c) equal to column (d)?

 5

Is Part II line 27 column (a) equal to the negative of Part III line 36 column (a)?

 6

Is the sum of Part II line 27 columns (a) plus (b) plus (c) equal to column (d)?

 7

Is Part II line 26 column (a) an amount other than zero?

 8

Is the sum of Part II line 26 columns (a) plus (b) plus (c) equal to column (d)?

 9

Is Part I line 11 an amount other than zero?

10 

Is Part I line 11 equal to Part II line 30 column (a)?

11

Is Part I line 4 an amount other than zero?

12 

Is Part I line 12a total assets an amount greater than zero?

13 

Is Part I line 12b total liabilities an amount grater than zero?

14 

Is Form 8916-A attached?

(2) Consolidated Schedule M-3 – Not Mixed Group

Tests are on the consolidated Schedule M-3, Parts I, II and III.

 1

Is Part II line 30 column (a) an amount other than zero? 

 2

Is the sum of Part II line 30 columns (a) plus (b) plus (c) equal to column (d)?

 3

Is Part III line 36 column (a) an amount other than zero?

 4

Is the sum of Part III line 36 columns (a) plus (b) plus (c) equal to column (d)?

 5

Is Part II line 27 column (a) equal to the negative of Part III line 36 column (a)?

 6

Is the sum of Part II line 27 columns (a) plus (b) plus (c) equal to column (d)?

 7

Is Part II line 26 column (a) an amount other than zero?

 8

Is the sum of Part II line 26 columns (a) plus (b) plus (c) equal to column (d)?

 9

Is Part I line 11 an amount other than zero?

 10

Is Part I line 11 equal to Part II line 30 column (a)?

 11

Is Part I line 4 an amount other than zero?

 12

Is Part I line 12a total assets an amount greater than zero?

 13

Is Part I line 12b total liabilities an amount grater than zero?

 14

Is Form 8916-A attached at all required levels?

(2) Consolidated Schedule M-3 – Mixed Group

Tests 1-9 are on each subgroup (1120, 1120-PC, 1120-L) sub-consolidated Schedule M-3 Parts II and III.

1

Is Part II line 29a column (a) an amount other than zero?

2

Is the sum of Part II line 29a columns (a) plus (b) plus (c) equal to column (d)?

3

Is Part III line 36 column (a) an amount other than zero?

4

Is the sum of Part III line 36 columns (a) plus (b) plus (c) equal to column (d)?

5

Is Part II line 27 column (a) equal to the negative of Part III line 36 column (a)?

6

Is the sum of Part II line 27 columns (a) plus (b) plus (c) equal to column (d)?

7

Is Part II line 26 column (a) an amount other than zero?

8

Is the sum of Part II line 26 columns (a) plus (b) plus (c) equal to column (d)?

9

Is Form 8916-A attached at all required levels?

Tests 10-21 are on the subgroup sub-consolidated Schedule M-3 Parts II and III, the consolidated Part II, and Form 8916.

10

Is the consolidated Part II line 29a column (a) equal to the 1120 subgroup sub-consolidated Part II line 29a column (a) adjusted for any consolidated elimination?

11

Is the consolidated Part II line 29a column (d) equal to the 1120 subgroup sub-consolidated Part II line 29a column (d) adjusted for any consolidated elimination?

12 

Is the consolidated Part II line 29b column (a) equal to the 1120-PC subgroup sub-consolidated Part II line 29a column (a), if the 1120-PC subgroup is present, adjusted for any consolidated elimination?

13 

Is the consolidated Part II line 29b column (d) equal to the 1120-PC subgroup sub-consolidated Part II line 29a column (d), if the 1120-PC subgroup is present, adjusted for any consolidated elimination?

14 

Is the consolidated Part II line 29c column (a) equal to the 1120-L subgroup sub-consolidated Part II line 29a column (a), if the 1120-L subgroup is present, adjusted for any consolidated elimination?

15 

Is the consolidated Part II line 29c column (d) equal to the 1120-L subgroup sub-consolidated Part II line 29a column (d), if the 1120-L subgroup is present, adjusted for any consolidated elimination?

16 

Is the sum of consolidated Part II lines 29a, 29b, and 29c column (a) equal to consolidated Part II line 30 column (a)?

17 

Is the sum of consolidated Part II lines 29a, 29b, and 29c column (d) equal to consolidated Part II line 30 column (d)?

18

Is consolidated Part II line 30 column (a) an amount other than zero?

19 

Is consolidated Part II line 30 column (d) an amount other than zero?

20

Is the sum of consolidated Part II line 30 columns (a) plus (b) plus (c) equal to column (d)?

21 

 Is Form 8916 line 1 equal to consolidated Part II line 30 column (d)?

Tests 22-27 are on the consolidated Schedule M-3, Parts I and II.

22

Is Part I line 11 an amount other than zero?

23

Is Part I line 11 equal to consolidated Part II line 30 column (a)?

24

Is Part I line 4 an amount other than zero?

25

Is Part I line 12a total assets an amount greater than zero?

26

Is Part I line 12b total liabilities an amount grater than zero?

27

Is Form 8916-A attached at all required levels?

Page Last Reviewed or Updated: 13-Mar-2014