Per the Instructions for Schedule M-3 (Form 1065):
Who Must File
Any entity that files Form 1065 must file Schedule M-3 (Form 1065) if any of the following is true:
- The amount of total assets at the end of the tax year reported on Schedule L, line 14, column (d), is equal to $10 million or more.
- The amount of adjusted total assets for the tax year is equal to $10 million or more. See Total Assets and Adjusted Total Assets below.
- The amount of total receipts for the tax year is equal to $35 million or more. Total receipts is defined in the instructions for Codes for Principal Business Activity and Principal Product or Service in the Instructions for Form 1065.
- An entity that is a reportable entity partner with respect to the partnership (as defined under these instructions) owns or is deemed to own, directly or indirectly, an interest of 50% or more in the partnership's capital, profit, or loss on any day during the tax year of the partnership.
A common trust fund or foreign partnership must file Schedule M-3 if it meets any of the tests discussed above.
Note. All references to a U.S. partnership in these instructions refer to any entity required to file Schedule M-3 (Form 1065), where appropriate.
Partnerships not required to file Schedule M-3 may voluntarily file Schedule M-3.