F1120S-266-01 - If Form 1120S, Schedule B, checkbox 'SchLAndSchM1NotRequiredInd' does not have a choice of "Yes" indicated and Schedule M-3 (Form 1120S) is not present in the return, then Form 1120S, Schedule M-1, 'IncomeLossAmt' must have a value.
A return receives this reject when the answer to Schedule B, Line 11 "Receipts and Assets at year end less than $250,000" was answered No and Schedules L (Balance Sheet) and M-1 (Reconciliation of Income) were not included with the return. Those two schedules are required when either receipts or assets are $250,000 or greater.
In the Schedule B menu in the return, look for the menu line "Receipts and Assets at year end less than 250,000". Correcting the return depends on the whether this is true or not.
- If the corporation's assets and receipts are each less than $250,000 at the end of the tax year, change the answer to the question to YES. In this case, Schedule L (Balance Sheet) and Schedule M-1 (Reconciliation of Income) are not required and the return is ready to e-file.
- If either the corporation's assets or receipts are $250,000 or greater at the end of the tax year, Schedule L (Balance Sheet) and Schedule M-1 (Reconciliation of Income) must be completed before the return can be electronically filed. In the return in TaxSlayer Pro, opening each schedule's menu creates the schedule, and then once in the menu you can make the entries necessary for it to be accurate.
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