How to generate or suppress the balance sheet, M-1, and M-2 on Form 1065 in ProConnect

When the requirements for Form 1065, Schedule B, Question 4 are met, the balance sheet information isn't required with the return, per the Instructions for Form 1065.

In this case, the following items will be suppressed:

• Schedule L
• Schedules M-1 / M-2
• Form 1065, page 1, Item F
• Schedule K, Item L

What are the requirements for Schedule B, Question 4?

• Total receipts for the tax year were less than $250,000.
• Total assets at the end of the tax year were less than $600,000.
• Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions).
• The partnership is not filing and is not required to file Schedule M-3.

If "Yes", the partnership isn't required to complete Schedules L, M-1 and M-2; Item F on page 1 of Form 1065; or Item L on Schedule K-1.

How do I answer yes to Schedule B, Question 4?

ProConnect Tax won't automatically mark this question "Yes," but produces a suggestion indicating this condition may apply.

Follow these steps to indicate that Question 4 requirements are met:

1. Go to the Input Return tab.
2. Select General from the left menu.
3. Select Other Information (Schedule B).
4. Mark the checkbox labeled "Question 4" requirements are met. When this is selected, the following items will be suppressed:
   • Schedule L
   • Schedule M-1
   • Schedule M-2
   • Form 1065, Page 1, Item F
   • Schedule K-1, Item L

Follow these steps to force Schedules L, M-1 and M-2 to print:

1. Go to the Input Return tab.
2. Select Balance Sheet, M-1, M-2 from the left menu.
3. Select Balance Sheet Miscellaneous.
4. Scroll to the Other subsection.
5. Enter 1 in the field Schedules L, M-1, and M-2: 1=force, 2=when applicable [Override].

Related topics

• Why is partners' capital account analysis blank for Schedule K-1, Item L (1065)?
• Entering and calculating the Schedule M-1 in ProConnect Tax