Schedule M-1 - Net Income (Loss) per Books

The net income (loss) per books amount that appears on Line 1 of Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return is a calculated field and will change when an adjustment amount is entered on the other lines of the Schedule M-1. The calculation of line 1 is as follows:

For 1120:

    Line 1 = line 10 + line 9 – (line 2 + line 3 + line 4 + line 5)

For 1065:

    Line 1 = line 9 + line 8 – (line 2 + line 3 + line 4)

For 1120S:

    Line 1 = line 8 + line 7 – (line 2 + line 3)

If the Schedule M-1 net income (loss) per books amount does not match the net income per books, an adjustment amount will need to be entered on the predetermined adjustment lines and/or the other adjustment worksheet.

The few predetermined adjustment lines on Schedule M-1 would include items such as the deductible portions of travel and entertainment expenses, depreciation, tax exempt interest and a worksheet to enter other adjustment amounts.

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