I know how to enter the QOF deferred gains but I was wondering are people treating these deferred gains as M-1 items or what?
Yes. Income on books not on tax return.
What else were you thinking?
That is what I was thinking but a co-worker disagreed. It also has to be reflected on the Schedule M-2 then. My deferral shows up on the M-2 as a LT Capital Loss is that correct?
1065 or 1120? If it's handled through M-1 there shouldn't be a need for an M-2 item, since it will be in Book Income.