Schedule M-1. — Instruction 1065 — Instructions for Form

Tip: Schedule M-3 may be required instead of Schedule M-1. See Item J. Schedule C and Schedule M-3 , earlier. See the Instructions for Schedule M-3 (Form 1065) for more information.

Line 2 Report on this line income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on the partnership’s books this year. Describe each such item of income. Attach a statement if necessary.

62 Instructions for Form 1065 (2025)

Line 3. Guaranteed Payments Include on this line guaranteed payments shown on Schedule K, lines 4a and 4b (other than amounts paid for insurance that constitutes medical care for a partner, a partner’s spouse, a partner’s dependents, and a partner’s children under age 27 who aren’t dependents).

Line 4b. Travel and Entertainment Include the following on this line.

Entertainment expenses, including entertainment-related meals and facilities, not deductible under section 274(a).
Non-entertainment-related meal expenses not deductible under section 274(n).
The part of business gifts over $25. See section 274(b).
Expenses of an individual allocable to conventions on cruise ships over $2,000. See section 274(h)(2).
Employee achievement awards of nontangible property or tangible property over $400 ($1,600 if part of a qualified plan). See section 274(j).
The part of the cost of luxury water travel expenses not deductible under section 274(m). See section 274(m)(1)(A).
Expenses for travel as a form of education. See section 274(m)(2).
Nondeductible club dues. See section 274(a)(3).
Qualified transportation fringes under section 274(a)(4).
Transportation and commuting expenses under section 274(l).
Other nondeductible travel and entertainment expenses.

Line 7 Report on this line deductions included on Schedule K, lines 1 through 13e, and 21, not charged against the partnership’s book income this year. Describe each such item of deduction. Attach a statement if necessary.

Line 9 This line 9 should reconcile to the Analysis of Net Income (Loss) per Return, line 1.