Question

The dividends received deduction is an adjustment on the Schedule M-1.

		a. True.
		b. False.

The ABC Corporation’s depreciation for tax purposes was $100,000. Its depreciation for book purposes was $120,000. This item will be an addition on Schedule M-1.

		a. True.
		b. False.

One of the purposes of the qualified business income deduction is to increase taxes on businesses that are operating in non-corporate business forms (e.g., sole proprietors, partnerships, and S corporations).

True

False

Answer 1

a. False

M-1 schedule is the reconciliation statement og income as per books with income as per tax returns

Dividend received deduction is not an expense which could impact profit/loss of an entity but it is a deduction which is taken post calculating income which reduce the taxable income

b. True

The excess of depreciation recorded in books than claimed for tax purpose will be an addition to schedule M-1

There are difference in methods of calculating depreciation which leade to such differences. Schedue M-1 is the reconciliation of book profits and tax profits

c. False

Qualified business income provide various benefits of tax deductions to non-corporate entities. The deductions most of the times are equivaent to 20% of the qualified income of the said business. Hence they are to decrease the tax burden