Final answer:
Schedules M-1 and M-3 are used for reporting differences between book and taxable income and are both filed with Form 1120; however, they do not require the same level of detail and are not required for corporations with total receipts and assets less than $250,000.
Step-by-step explanation:
The student asks about the requirements for Schedules M-1 and M-3, which are part of the corporate tax filings. Here is clarification for each statement:Schedules M-1 and M-3 do not require the same level of detail. Schedule M-1 is a simpler reconciliation for smaller corporations, whereas Schedule M-3 requires more detailed information and is for larger corporations.Both schedules are not required for corporations with total receipts and assets less than $250,000. Small corporations that meet this threshold usually do not have to file either schedule.Both schedules are indeed for reporting differences between book income (income reported to shareholders) and taxable income (income reported to the IRS).Finally, both schedules are filed with Form 1120, the U.S. Corporation Income Tax Return.
Schedules M-1 and M-3 are both schedules filed with Form 1120, which is the U.S. Corporation Income Tax Return form. So, option 4) is correct. Regarding option 1), Schedules M-1 and M-3 do not require the same level of detail to be reported. Schedule M-1 reconciles the income reported on the tax return with the financial statement income, while Schedule M-3 provides a more detailed reconciliation of book and tax income. Therefore, option 1) is incorrect. Option 3) is correct as both schedules are used for reporting differences in book and taxable income. Finally, option 2) is also correct. Corporations with total receipts and assets less than $250,000 are not required to file Schedules M-1 and M-3.