I'm doing the Schedule M-1 and M-2 for the first time, so it took me hours trying to reconcile M-2 only to realize that TTB is pulling data from a place contrary to what the IRS instructions say.
In TTB, the Smart Worksheet for Schedule M-2, Line 3, says that the data source is Form 1065, p5-6, Sch M-1, Line 9. It then works some calculations and returns an adjusted net income (tax basis) to Line 3.
Yet the IRS Instructions state "Enter on Schedule M-2, line 3, the amount from the Analysis of Net Income (Loss) per Return, line 1. Generally, this is the same as the amount entered on Schedule M-1, line 9, (if the partnership is required to complete Schedule M-1)."
Maybe TTB is counting on line 9 and line 1 being the same. But on our return, they are not. There's about a $20k difference that would allow my M-2 to balance. And none of the adjustments in the smart worksheet make up that difference (I only found one that applies).
I've seen this before where TTB or TTH&B pull the wrong data. Can anyone confirm this?
