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Discussion Question $3-23($L$.7)$

In the current year, Woodpecker, Inc., a C corporation with $$8,500,000$ in assets, deducted amortization of $$40,000$ on its financial statements and $$55,000$ on its Federal tax return.

Is Woodpecker required to file a Schedule M$-3?$

$$

If Woodpecker is required to file a Schedule M$-3,$ the difference in amortization amounts treated on that schedule is reported on line $28,$

Part III as follows:

$1$ in column $($a$)$ book amortization $$

$1q,$ X in column $($b$)q,$ temporary difference $x.$

$1q,$ X in column $($d$)q,$ tax amortization $x.$

Feedhack

${?}^{TT}$ Chack My Work

Schedule M$-1$ of Form $1120$ is used to reconcile net income as computed for financial accounting purposes with taxable income reported on the corporation's income tax return $($commonly referred to as book$-$tax differences$).$ However, the expanded reconciliation of book and taxable income $($loss$)$ for certain corporations is reported on Schedule M$-3.$