Schedule M-1 Help

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    Topic
  • #164762
    hopeful_cpa
    Participant

    Does anybody know where I can get problems and/or simulation that would allow me to practice M-1?

    BEC: Done
    REG: Done
    AUD: Done
    FAR: Done

    I'M DONE!!!!!! AAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Viewing 6 replies - 1 through 6 (of 6 total)
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  • #319648
    Givemesleep
    Member

    @hopefull – M-1 is simply the reconciliation between book and tax items. Not heavily tested from my experience. There are better areas to focus on like basis calculation for S Corps and Especially partnerships

    Reg 11/15/2011 - 80
    Aud 02/28/2012 - 81
    Bec 05/31/2012 - 78
    Far 08/31/2012 - 83 Do you believe in Miracles, YES !!!

    CPA License received 10/2012 !!
    CFE License received 04/2013 !!
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    Givemesleep

    #319649
    hopeful_cpa
    Participant

    ok great.. thank you very much.

    BEC: Done
    REG: Done
    AUD: Done
    FAR: Done

    I'M DONE!!!!!! AAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    #319650
    Anonymous
    Inactive

    Reconciliation of book income to taxable income and schedule M-3 are both separate lines on the CSO which means the AICPA has placed significant importance on those areas.

    https://www.aicpa.org/BecomeACPA/CPAExam/ExaminationContent/ContentAndSkills/DownloadableDocuments/CSOs-SSOs-Effective.7-1-11.pdf

    #319651
    Anonymous
    Inactive

    omfg I was working on my first c-corp tax return and my supervisor was trying to explain the various m-1 adjustments…i was going nuts. work really humbles you..i did okay in college (3.77 gpa) but once i stepped into the “real world” — i had no clue wtf i was doing.

    i almost had a panic attack my first few weeks..was doubting myself and wondering if accounting was the wrong field for me to go to.

    but isn't m-1 essentially the same thing as what was covered in deferred tax assets/liabilities?

    #319652
    Justinnnn
    Member

    @CannotPassAgain

    Try Schedule M-3 🙂

    What you said about “deferred tax assets” is somewhat true. The “M-1” adjustment is the change in your deferred tax asset or liability, but gross of tax, not net of tax.

    For example, if your bad debt reserve increases from $100 to $200, your “M-1” adjustment is $100. At the end of the day, your deferred tax asset is the $200 X 35% tax rate (simplified, assuming constant tax rate and not considering state effective tax rate) = $70, assuming no valuation allowance. Your DTA gross of tax changed from $100 to $200, your DTA net of tax (the correct phrasing of deferred tax asset) changed from $35 to $75.

    You might be freaking out now but don't worry you will understand very quickly, most of corporate tax isn't taught in college. Most of your common M-1s will be changes in TB accounts as the accounting methods were established by people before you. You will spend a lot of time figuring out why fixed assets don't roll forward. And I promise you, you will understand GAAP better than the guys in the audit department, if you are using a DTA approach to all of your M-1s.

    REG 80 2/7/11
    FAR 91 10/8/11
    AUD 97 11/22/11
    BEC 96 2/4/12

    CPA 3/15/13

    #319653
    Anonymous
    Inactive

    okay…i hope you're right. luckily i'll be able to practice in audit, too soon enough..yay.

    i don't know if it'd help much even if i did corporate tax in college. i think it's just more of theory vs application i.e. school vs. work.

    once again, work is humbling me. i just hope i can make it through my first busy season and come out a seasoned professional in the accounting world

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