Assuming C-corp, based on the date.

That diagnostic really means "you didn't enter anything for book-basis income on Screen 39.2"

If you click on the diagnostic, it will take you to the right place, which is Screen 39, then M-3 on the top left to get to 39.2, then under Part 1, second bold heading is Net Income (Loss) Reconciliation, then third item down is "worldwide consolidated new income or loss from the income statement source identified above," which means "book income."

Lacerte generates M-1 Line 1 automatically from your tax-basis inputs. You may also have diagnostics regarding exceptions to filing M-3 or options to file the abbreviated M-3.

If you actually have an M-3 requirement, and aren't already very familiar with M-1, you should plan to spend a significant amount of time with the M-3 forms instructions.