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Pima Arizona Form 1065 (Schedule M-3): What You Should Know

Schedule M-2 is required when (a) the partnership's income is in excess of 250,000 to 500,000, and (b) the partnership has gross sales of 250,000 or less in the tax year. The calculation is a book income of the partnership equal to its gross book profits divided by its gross sales. Schedule M-3 is required when (a) the total profits of the partnership are greater than 500,000. The calculation is income from partnership assets multiplied by the partnership's total gross book profits divided by its gross sales. Schedule M-4 is the most frequently requested by taxpayers with partnerships that file Form 1065. The Form 1065 is required to be filed with the Schedule M-3 if that person has a sales or gross income of 500,000 or more in any tax year; or if the person has gross receipts of 500,000 or more in any tax year. A copy of the Schedule M-4 is located on the Forms and Records page for any partnership. In addition, the Schedule M-4 is a part of our website for easy sharing of forms with your partners.

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