SCHEDULE M-3               Net Income (Loss) Reconciliation for S Corporations 
(Form 1120-S) 
(Rev. December 2019)             With Total Assets of $10 Million or More                                           OMB No. 1545-0123 
                                                    ▶ Attach to Form 1120-S.
Department of the Treasury     ▶ Go to www.irs.gov/Form1120S for instructions and the latest information.
Internal Revenue Service 
Name of corporation                                                                                        Employer identification number 

Part I  Financial Information and Net Income (Loss) Reconciliation (see instructions) 
1a  Did the corporation prepare a certified audited non-tax-basis income statement for the period ending with or within this tax 
    year? See instructions if multiple non-tax-basis income statements are prepared.
       Yes. Skip line 1b and complete lines 2 through 11 with respect to that income statement. 
       No.  Go to line 1b. 
b   Did the corporation prepare a non-tax-basis income statement for that period? 
       Yes. Complete lines 2 through 11 with respect to that income statement. 
       No. Skip lines 2 through 3b and enter the corporation’s net income (loss) per its books and records on line 4a. 

2   Enter the income statement period:  Beginning           /             /         Ending                 /    / 

3 a Has the corporation’s income statement been restated for the income statement period on line 2? 
       Yes. If “Yes,” attach an explanation and the amount of each item restated.
       No. 
b   Has the corporation’s income statement been restated for any of the five income statement periods immediately preceding the
    period on line 2? 
       Yes. If “Yes,” attach an explanation and the amount of each item restated.
       No. 
4a  Worldwide consolidated net income (loss) from income statement source identified in Part I, line 1  .         4a 
b   Indicate accounting standard used for line 4a (see instructions): 
    (1)   GAAP             (2)   IFRS 
    (3)   Tax-basis        (4)   Other (specify)

5a  Net income from nonincludible foreign entities (attach statement)  .      . . . . .       . . .      . . .    5a (                          ) 
b   Net loss from nonincludible foreign entities (attach statement and enter as a positive amount)  .      . .    5b 

6 a Net income from nonincludible U.S. entities (attach statement)  .       . . . . . .       . . .      . . .    6a (                          ) 
b   Net loss from nonincludible U.S. entities (attach statement and enter as a positive amount) .        . . .    6b 

7a  Net income (loss) of other foreign disregarded entities (attach statement) .  . . .       . . .      . . .    7a 
b   Net income (loss) of other U.S. disregarded entities (except qualified subchapter S subsidiaries) 
    (attach statement)  .  .   . . .   . . .    . . .  .  . . .       .     . . . . . .       . . .      . . .    7b 
c   Net income (loss) of other qualified subchapter S subsidiaries (QSubs) (attach statement)  .         . . .    7c 

8   Adjustment  to  eliminations  of  transactions  between  includible  entities  and  nonincludible  entities 
    (attach statement)  .  .   . . .   . . .    . .  . .  . . .       .     . . . . . .       . . .      . . .    8 

9   Adjustment to reconcile income statement period to tax year (attach statement)    .       . . .      . . .    9 

10  Other adjustments to reconcile to amount on line 11 (attach statement)  .     . . .       . . .      . . .    10 

11  Net income (loss) per income statement of the corporation. Combine lines 4 through 10                . . .    11 
    Note: Part I, line 11, must equal Part II, line 26, column (a); or Schedule M-1, line 1. See instructions. 

12  Enter the total amount (not just the corporation’s share) of the assets and liabilities of all entities included or removed on the following lines:

                                             Total Assets                         Total Liabilities 
a   Included on Part I, line 4 
b   Removed on Part I, line 5 
c   Removed on Part I, line 6 
d   Included on Part I, line 7 

For Paperwork Reduction Act Notice, see the Instructions for Form 1120-S.     Cat. No. 39666W     Schedule M-3 (Form 1120-S) (Rev. 12-2019)

Schedule M-3 (Form 1120-S) (Rev. 12-2019)                                                                                  Page  2 
Name of corporation                                                                                     Employer identification number 

Part II Reconciliation of Net Income (Loss) per Income Statement of the Corporation With Total Income 
        (Loss) per Return (see instructions) 
                      Income (Loss) Items                          (a)                       (b)        (c)            (d) 
                                                                   Income (Loss) per         Temporary  Permanent  Income (Loss) per 
         (attach statements for lines 1 through 10)                Income Statement          Difference Difference     Tax Return 
1   Income (loss) from equity method foreign corporations 
2   Gross foreign dividends not previously taxed  .           . .
3   Subpart F, QEF, and similar income inclusions             . .
4   Gross foreign distributions previously taxed         .    . .
5   Income (loss) from equity method U.S. corporations .
6   U.S. dividends not eliminated in tax consolidation          .
7   Income (loss) from U.S. partnerships .        . .    .    . .
8   Income (loss) from foreign partnerships .       .    .    . .
9   Income (loss) from other pass-through entities            . .
10  Items relating to reportable transactions .     .    .    . .
11  Interest income (see instructions) .        . . .    .    . .
12  Total accrual to cash adjustment  .         . . .    .    . .
13  Hedging transactions  .   .           . . . . . .    .    . .
14  Mark-to-market income (loss)  .           . . . .    .    . .
15  Cost of goods sold (see instructions) .       . .    .    . .  (                       )                       (                       )
16  Sale versus lease (for sellers and/or lessors)  .         . .
17  Section 481(a) adjustments  .           . . . . .    .    . .
18  Unearned/deferred revenue .             . . . . .    .    . .
19  Income recognition from long-term contracts  .            . .
20  Original issue discount and other imputed interest  .
21a Income  statement  gain/loss  on  sale,  exchange,  
    abandonment, worthlessness, or other disposition of  
    assets other than inventory and pass-through entities 
b   Gross  capital  gains  from  Schedule  D,  excluding  
    amounts from pass-through entities  .         . .    .    . .
c   Gross  capital  losses  from  Schedule  D,  excluding  
    amounts  from  pass-through  entities,  abandonment  
    losses, and worthless stock losses          . . .    .    . .
d   Net  gain/loss  reported  on  Form  4797,  line  17,  
    excluding  amounts  from  pass-through  entities,  
    abandonment losses, and worthless stock losses              .
e   Abandonment losses  .     .           . . . . . .    .    . .
f   Worthless stock losses (attach statement)  .         .    . .
g   Other gain/loss on disposition of assets other than  
    inventory  .      . . . . .           . . . . . .    .    . .
22  Other  income  (loss)  items  with  differences  (attach  
    statement)        . . . . .           . . . . . .    .    . .
23  Total income (loss) items.            Combine lines 1 through 
    22  .  .        . . . . . .           . . . . . .    .    . .
24  Total expense/deduction items             (from Part III, line 
    32)  . .        . . . . . .           . . . . . .    .    . .
25  Other items with no differences           . . . .    .    . .
26  Reconciliation totals. Combine lines 23 through 25 

    Note: Line 26, column (a), must equal Part I, line 11, and column (d) must equal Form 1120-S, Schedule K, line 18. 
                                                                                                        Schedule M-3 (Form 1120-S) (Rev. 12-2019)

Schedule M-3 (Form 1120-S) (Rev. 12-2019)                                                                   Page  3 
Name of corporation                                                                          Employer identification number 

Part III Reconciliation of Net Income (Loss) per Income Statement of the Corporation With Total Income  
         (Loss) per Return—Expense/Deduction Items (see instructions) 
                                                                 (a)              (b)        (c)        (d) 
                    Expense/Deduction Items                      Expense per      Temporary  Permanent  Deduction per 
                                                                 Income Statement Difference Difference Tax Return 
1   U.S. current income tax expense  .          . . . . . .
2   U.S. deferred income tax expense            . . . . . .
3   State and local current income tax expense        . . .
4   State and local deferred income tax expense  .      . .
5   Foreign  current  income  tax  expense  (other  than  
    foreign withholding taxes)            . . . . . . . . .
6   Foreign deferred income tax expense           . . . . .
7   Equity-based compensation               . . . . . . . .
8   Meals and entertainment .             . . . . . . . . .
9   Fines and penalties   . .             . . . . . . . . .
10  Judgments, damages, awards, and similar costs .       .
11  Pension and profit-sharing  .           . . . . . . . .
12  Other post-retirement benefits  .         . . . . . . .
13  Deferred compensation  .              . . . . . . . . .
14  Charitable   contribution   of   cash   and   tangible 
    property  .     . . . . .             . . . . . . . . .
15  Charitable contribution of intangible property  .   . .
16  Current year acquisition or reorganization investment 
    banking fees .    . . . .             . . . . . . . . .
17  Current year acquisition or reorganization legal and  
    accounting fees .   . . .             . . . . . . . . .
18  Current year acquisition/reorganization other costs  .
19  Amortization/impairment of goodwill  .        . . . . .
20  Amortization of acquisition, reorganization, and 
    start-up costs  .   . . .             . . . . . . . . .
21  Other amortization or impairment write-offs       . . .
22  Reserved  .     . . . . .             . . . . . . . . .
23a Depletion—Oil & Gas  .  .             . . . . . . . . .
b   Depletion—Other than Oil & Gas  .           . . . . . .
24  Depreciation .    . . . .             . . . . . . . . .
25  Bad debt expense  .   . .             . . . . . . . . .
26  Interest expense (see instructions)         . . . . . .
27  Corporate-owned life insurance premiums  .        . . .
28  Purchase   versus   lease   (for   purchasers   and/or 
    lessees)  .     . . . . .             . . . . . . . . .
29  Research and development costs .            . . . . . .
30  Section 118 exclusion (attach statement)        . . . .
31  Other  expense/deduction  items  with  differences  
    (attach statement)  . . .             . . . . . . . . .
32  Total expense/deduction  items.             Combine lines 1  
    through  31.  Enter  here  and  on  Part  II,  line  24,  
    reporting positive amounts as negative and negative  
    amounts as positive  .  .             . . . . . . . . .
                                                                                             Schedule M-3 (Form 1120-S) (Rev. 12-2019)