Is there a way to add a reconciliation statement in situations where the Schedule M-2 is on tax basis and Schedule L is on GAAP basis (or other basis)?
I would like to put a reconciliation statement for ending capital on Sch. L to ending tax capital on M-2
Added a few edits:
I am a bit confused and would greatly appreciate clarification. A bit embarrassed to be asking this so please bear with me.
For an S-Corporation that uses SL depreciation for book purposes and MACRS for tax purposes, is the following correct?
- Schedule L will be per books using book depreciation instead of tax depreciation
- Schedule M-1 will show the book-to-tax difference for depreciation on line 6a (for years when MACRS > SL)
- Schedule M-2 won't match RE on Schedule L and the difference will be any non-deductible expenses, such as 50% of meals.
- Shareholder Basis Calculation will match Schedule M-2
I know there's a lot going on in my question but I am just a bit confused about the interplay because it seems too many things aren't matching when there are two different depreciation methods (book and tax)