MYCPE ONE

Partnership Reconciliation with CCH: Schedules M-1, M-2 & M-3 1.5 Credits

Partnership Reconciliation with CCH: Schedules M-1, M-2 & M-3 1.5 Credits

Form 1065 Partnership Tax Series: Part 4

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On Demand
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  • Answer the polling questions
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Learning Objectives

  • Explain the difference between permanent and temporary book-tax differences and how each is reflected on Schedule M-1.
  • Apply the six-line Schedule M-1 reconciliation to move from net income per books to income per Schedule K.
  • Prepare the nine-line Schedule M-2 tax-basis capital rollforward and route tax-exempt income, nondeductible items, and distributions correctly.
  • Verify the required tie-outs among Schedules M-1, M-2, L, K, and the partners' Schedule K-1 capital accounts.
  • Identify when Schedule M-3 replaces Schedule M-1 and determine which parts are required based on partnership asset levels.
  • Apply the four-column Schedule M-3 reconciliation to classify temporary and permanent differences and document significant reconciling items.

Course Overview

Partnership return reconciliation is where financial reporting and tax reporting meet. For preparers working with Form 1065, Schedules M-1, M-2, and M-3 provide the critical framework for explaining book-to-tax differences, tracking partners' capital, and maintaining consistency across the return. This CE course focuses on the practical connections among these schedules and the return sections they must reconcile to.

Participants work through permanent and temporary book-tax differences on Schedule M-1, the nine-line tax-basis capital rollforward on Schedule M-2, and the expanded four-column reconciliation required on Schedule M-3 for larger partnerships. Using the Maple Street Kitchen and River District Restaurant Group examples, the CE course demonstrates how items such as meals disallowance, tax-exempt interest, depreciation timing differences, distributions, partnership liabilities, §1231 gains, penalties, and other adjustments move through the return and affect partner reporting.

Major Topic:

  • Permanent and temporary book-tax differences on Schedule M-1
  • Six-line Schedule M-1 reconciliation from book income to Schedule K
  • Tax-basis capital reporting and the nine-line Schedule M-2 rollforward
  • Required tie-outs among Schedules M-1, M-2, L, K, and Schedule K-1
  • Schedule M-3 filing thresholds, asset tiers, and three-part structure
  • Four-column Schedule M-3 reconciliation and high-risk adjustment lines

This CE course is the fourth part of the Form 1065 Partnership Tax Series. It helps participants connect book income, taxable income, partner capital, and large-partnership reconciliation requirements across Schedules M-1, M-2, and M-3. By applying the required formulas, tie-outs, and documentation principles, participants can strengthen return consistency, identify reconciliation errors before filing, and prepare partnership returns with greater accuracy and confidence.

For more CCH software courses, click here.

On Demand Credits for All Qualifications

License details Credits Status
Taxes for Certified Public Accountants (CPA-US) 1.5 CPE Approved
Federal tax-related matters for Enrolled Agents (EA) (Approval No. GEHNZ-T-03384-26-S) 1 CE Approved
Federal tax-related matters for Annual Filing Season Program (AFSP) (Approval No. GEHNZ-T-03384-26-S) 1 CE Approved
Federal tax-related matters for California Registered Tax Preparers (CRTP) (Approval No. 6273-CE-02839) 1 CE Approved
Federal tax-related matters for Oregon Registered Tax Preparers (ORTP) (Approval No. GEHNZ-T-03384-26-S) 1 CE Approved
Federal tax-related matters for Maryland Tax Preparer (MRTP) (Approval No. GEHNZ-T-03384-26-S) 1 CE Approved
Taxes for Delaware Licensed Public Accountant (DE-LPA) 1.5 CPE Approved
Federal tax-related matters for LTC (Approval No. GEHNZ-T-03384-26-S) 1 CE Approved
Taxes for Iowa Licensed Public Accountant (IA-LPA) 1.5 CPE Approved
Taxes for Maine Licensed Public Accountant (ME-LPA) 1.5 CPE Approved

Additional Information

Credits

1.5

Course Level

Intermediate

Instructional Method

QAS Self Study

Group Internet Based

Pre-requisites

None

Advance Preparation

None

NASBA APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

IRS APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor Id#: GEHNZ) has entered into an agreement with the Internal Revenue Service, to meet the requirements of 31 Code of Federal Regulations, section 10.6(g), covering maintenance of attendance records, retention of program outlines, qualifications of instructors, and length of class hours. This agreement does not constitute an endorsement by the IRS as to the quality of the program or its contribution to the professional competence of the enrolled individual. Credit earned by attendees with a PTIN will be reported directly to the IRS as required of all providers. To ensure your CPE hours are reported, update your profile in My Account to include your PTIN number. Please note: IRS CE is only mandatory for EAs and ERPAs. For all other tax return preparers, CE is voluntary.

CTEC APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC, in accordance with the standards set forth in Circular 230 section 10.6, grants Continuing Education (CE) credits based on a 50-minute hour. MY-CPE LLC is approved by the California Tax Education Council (CTEC) (Provider Number – 6273) to offer continuing education courses that count towards the annual continuing education requirement for CTEC Registered Tax Preparers. Additional information regarding registration as a tax preparer can be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, toll-free at (877) 850-2832, or by visiting www.ctec.org.

Need to meet your Enrolled Agent (EA) Continuing Education (CE) requirements? MYCPE ONE has you covered. Our Online EA CE courses make it easy to earn credits while expanding your expertise in tax regulations and practices. Stay ahead with the latest updates and in-depth insights designed to keep you at the top of your field. With flexible scheduling and a user-friendly platform, MYCPE ONE offers a convenient, interactive learning experience. Start advancing your career today!

 

About Instructor

Kateryna Khalandach

Kateryna Khalandach CPA

Founder, Not So Boring CPA

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Kateryna Khalandach, CPA, is a California-licensed tax expert and founder of Not So Boring CPA. With 10+ years of experience, she makes complex tax concepts practical through engaging education, training, and real-world work.

With experience at Ernst & Young and a focus on high-net-worth clients, Kateryna blends tax expertise with process efficiency. Her courses and mentorship help CPAs, EAs, preparers, and bookkeepers build confident careers.

On Demand FAQs

What is Self Study (QAS)?

Self Study QAS (Quality Assurance Service) is a NASBA and other regulatory bodies approved program designed for Professionals to complete their Continuing Professional Education credits through self-paced, interactive courses that meet the highest standards of quality and compliance. Our courses qualify for credits with NASBA, IRS, CFP Board, HRCI, SHRM, Payroll Org, FP Canada, and 25+ other professional organizations.

How do I earn CPE credits through self-study?

To earn CPE credits, you must complete the self-study course, pass the required assessments, and submit the necessary documentation. Credits are awarded based on the completion of course hours and successfully passing the assessments.

Are the self-study courses accepted by NASBA and other professional organizations?

MY-CPE LLC courses are accepted for continuing education credit by various professional certification programs, including NASBA, IRS, CFP Board, and HRCI. MY-CPE LLC is also recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP® and SHRM-SCP® recertification activities.

What are the requirements to maintain compliance with self-study courses?

To maintain compliance, you must follow the guidelines set by NASBA and other regulatory bodies, which include completing the course within the specified timeframe, passing the assessments, and keeping accurate records of your learning activities.

How can I access my course completion certificates?

After successfully completing a self-study course and passing the assessments, you can access and download your course completion certificates from your account dashboard on our platform. These certificates are recognized by NASBA, IRS, CFP Board, HRCI, SHRM, Payroll Org, FP Canada, and 25+ other professional organizations for compliance and reporting purposes.

How are credits reported to governing bodies?

We issue instant credit certificates, ensuring they are valid for presentation to governing bodies. Typically, we report IRS, CTEC, CFP, IDFP, IWI, VBOA Ethics credits within 7 days – the fastest in the industry.

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Partnership Reconciliation with CCH: Schedules M-1, M-2 & M-3

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