Per IRS Instructions for Schedule M-3 (Form 1065) Net Income (Loss) Reconciliation for Certain Partnerships, on page 1:

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, later.
• 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.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.