I am having a similar issue. It looks like there were changes to 1065 in the past 2 years (see link below). Per form 1065 instructions, M2 Line 3 now equals M1 Line 9. This is causing my M2 to be incorrect and under report partner capital and thus my balance sheet is incorrect. I am under the impression that balance sheet is still per books. The previous posts regarding M2 Line 3 = M1 Line 1, M1 Line 9 = Analysis of NI, M2 Line 9 = Sch L Line 21 is no longer correct I believe. If you have book/tax differences, in my case caused by guaranteed payments and Section 179 recapture, M2 Line 3 will never equal M1 Line 1. I believe my only way to fix this is what you did, M2 Line 4 adjustment to reconcile the book/tax differences that are not actually there. I have no book/tax differences in the way we track depreciation or the way we book recapture. Historically I have never had an issue with this section in reconciling my books with BS/M1/M2.
https://proconnect.intuit.com/community/lacerte-tax-news-updates/discussion/why-is-the-amount-on-my-...
