The Massachusetts 3 Form, officially known as Form 3, is a document that partnerships must complete for the Massachusetts Department of Revenue to report their income, deductions, and credits for the tax year. This form requires detailed financial information, including but not limited to, gross income, adjustments, and apportionment percentages, all to be filled out in black ink for either fiscal or calendar year filers. If you're part of a partnership looking to stay compliant with Massachusetts tax obligations, ensuring accurate and timely filing of the Massachusetts 3 Form is crucial. Click the button below to begin the process of filling out your form.
Filing taxes can often seem like a complex maze, especially for partnerships navigating the specific requirements set by state authorities. The Massachusetts Form 3 stands as a critical document for partnerships operating within the state, demanding careful attention to detail for compliance and accuracy. It's designed for the reporting of income, financial status, and other pertinent information for the tax year, marked by its requirement for partners to fill it out using black ink, signaling its official nature. This form covers a wide array of information, starting from basic identification details of the partnership such as the name, address, and Federal Identification Number (FID), extending to more intricate financial data including the accounting method used, income apportionment, and gross income calculations. Partnerships are also required to outline their principal business activity, products or services, and include any pertinent schedules or documents such as the Schedule 3K-1 for each partner. The electronic filing mandate for partnerships with more than 25 partners is a noteworthy feature, catering to efficiency and environmental considerations. It's crucial for partnerships to heed the guidelines for amended returns, specific deductions, and income adjustments, ensuring an accurate portrayal of their financial state to the Massachusetts Department of Revenue.
Fill out in black ink.
Massachusetts Department of Revenue
2020
Form 3
Tax year beginning
Tax year ending
Calendar year filers enter 01–01–2020 and 12–31–2020 below; fiscal year filers enter appropriate dates M M D D Y Y Y Y M M D D Y Y Y Y
NAME OF PARTNERSHIP
FEDERAL IDENTIFICATION NUMBER (FID)
MAILING ADDRESS
CITY/TOWN/POST OFFICE
STATE
ZIP + 4
C/O NAME
C/O ADDRESS
A. PRINCIPAL BUSINESS ACTIVITY
B. PRINCIPAL PRODUCT OR SERVICE
C. BUSINESS CODE NUMBER
D. DATE BUSINESS STARTED M M D D Y Y Y Y E. TOTAL ASSETS
0 0
F. Fill in if amended return (see instructions)
G. Reason for filing (fill in all that apply)
Amended return due to federal change
Technical termination
Filing Schedule TDS
Initial return
Final return
Name change
Common-trust fund
Enclosing Schedule FCI
H. Accounting method (fill in one)
Cash
Accrual
Other
I. How many Schedules 3K-1 are attached to this return? (Attach one Schedule 3K-1 for each person who was a partner at any time during tax year) . .
. . . . . . . . . . .
Note: Partnerships with more than 25 partners must file electronically. See TIR 09-18 for more information.
J. Fill in if you are a member of a lower-tier entity
. . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
. . . . .
. . . . . . . . . . . . . .
K. Fill in if this partnership is an investment partnership as defined in the Pass-Through Entity Withholding Reg., 830 CMR 62B.2.2(2). . . . . . . . . . . . . . . . . . . . . . . . . .
L. Fill in if this partnership elected out of the federal centralized partnership audit regime this tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 Gross income (from worksheet in instructions). See Partnership E-File Mandate Worksheet
.1
0
2
3
4
5
6
Fill in if this partnership is engaged exclusively in buying, selling, dealing in or holding securities on its own behalf and not as a broker . . . . . . . . . . . . . . . . . . . . .
Fill in if this partnership is organized as a Limited Liability Company and treated as a partnership for federal income tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . .
Fill in if this partnership is a publicly traded partnership as defined in IRC § 469(k)2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fill in if there has been a sale or transfer or liquidation of a partnership interest during the period reported on this return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income apportionment percentage (from line 46 of Income Apportionment Schedule, or 100%, whichever applies). . . . . . . . . . . . . . .6
SIGN HERE. Under penalties of perjury, I declare that to the best of my knowledge and belief this return and enclosures are true, correct and complete.
SIGNATURE OF GENERAL PARTNER
DATE
PRINT PAID PREPARER’S NAME
PAID PREPARER’S SSN OR PTIN
/
TITLE
PAID PREPARER’S PHONE
PAID PREPARER’S EIN
MAY DOR DISCUSS THIS RETURN WITH THE PREPARER?
PAID PREPARER’S SIGNATURE
IS PAID PREPARER SELF-EMPLOYED?
Yes
NAME OF DESIGNATED TAX MATTERS PARTNER
IDENTIFYING NUMBER OF TAX MATTERS PARTNER
BE SURE TO COMPLETE ALL 10 PAGES OF FORM 3. MAIL TO MASSACHUSETTS DEPARTMENT OF REVENUE, PO BOX 7017, BOSTON, MA 02204.
2020 FORM 3, PAGE 2
FEDERAL IDENTIFICATION NUMBER
7
Fill in if any partners in this partnership file as part of a nonresident composite income tax return
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If filled in, enter Federal Identification number under which the composite return is filed
. .7
Number of partners included in composite return
. . . . . . . . . . . . . . . . . . . . . . . . .
8
Fill in if this partnership is under audit by the IRS, or has been audited in a prior year
9
Withholding amount. Add all Schedules 3K-1, line 37
. .9
10
Payments made with composite return. Add all Schedules 3K-1, line 38
.10
11
Credit for amounts withheld by lower-tier entities. Add all Schedules 3K-1, line 39
.11
12
Payments made with a composite filing by lower-tier entities. Add all Schedules 3K-1, line 40
.12
13
14 Other income or loss (from U.S. Form 1065, Schedule K, line 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 State, local and foreign income and unincorporated business taxes or excises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 16 Subtotal. Add lines 13 through 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 IRC § 1231 gains or losses included in line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Subtotal. Subtract line 17 from line 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
19Adjustments (if any) to line 18. Enter the applicable line number from U.S. Form 1065 and the amount of the adjustment.
a. Line number
Amount
b. Line number
00
Total adjustments 19
20 Massachusetts ordinary income or loss. Combine lines 18 and 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 21 Net income or loss from rental real estate activities (from U.S. Form 1065, Schedule K, line 2) . . . . . . . . . . . . . . . 21
22Adjustments (if any) to line 21. Enter the applicable line number from U.S. Form 8825 and the amount of the adjustment.
Total adjustments 22
23 Adjusted Massachusetts net income or loss from rental real estate activities. Combine lines 21 and 22 . . . . . . . . . 23 24 Net income or loss from other rental activities (from U.S. Form 1065, Schedule K, line 3c) . . . . . . . . . . . . . . . . . . 24
25Adjustments (if any) to line 24. Enter the applicable line number from U.S. Form 1065 and the amount of the adjustment.
Total adjustments 25
26 Adjusted Massachusetts net income or loss from other rental activities. Combine lines 24 and 25 . . . . . . . . . . . . . 26
2020 FORM 3, PAGE 3
27
U.S. interest, dividend and royalty income, not including capital gains (from U.S. Form 1065, Schedule K, lines 5,
6a and 7)
.27
28
Interest on U.S. debt obligations included in line 27
.28
29
5.0% interest from Massachusetts banks included in line 27
.29
30
Interest (other than Massachusetts bank interest) and dividend income included in line 27
.30
31
Non-Massachusetts state and municipal bond interest
.31
32
Royalty income included in line 27
.32
33
Total short-term capital gains included in U.S. Form 1065, Schedule D, line 7
.33
34
Total short-term capital losses included in U.S. Form 1065, Schedule D, line 7
35
Gain on the sale, exchange or involuntary conversion of property used in a trade or business and held for one year
or less (from U.S. Form 4797)
.35
36
Loss on the sale, exchange or involuntary conversion of property used in a trade or business and held for one year
37
Net long-term capital gain or loss (from U.S. Form 1065, Schedule K, line 9a)
38
Long-term IRC § 1231 gains or losses not included in line 37
39
Long-term gains on collectibles and pre-1996 installment sales included in line 37
.39
40Adjustments to lines 33 through 39, including any gain or loss from Massachusetts fiduciaries. Enter the line number and amount from U.S. Form 1065 to which the adjustment applies.
Total adjustments 40
2020 FORM 3, PAGE 4
Income Apportionment Schedule
41Complete the Income Apportionment Schedule only if: there is one or more corporate or nonresident individual partners; income was derived from business activities in another state; and such activities provide that state with the jurisdiction to levy an income tax or a franchise tax.
SPECIFY WHETHER FACTORY, SALES OFFICE,
ACCEPTS
REGISTERED TO DO
FILES RETURNS
CITY AND STATE
WAREHOUSE, CONSTRUCTION SITE, ETC.
ORDERS
BUSINESS IN STATE
IN STATE
42
Tangible property
a. Property owned (averaged)
Massachusetts
Worldwide
b. Property rented (capitalized)
c. Total property owned and rented
d. Tangible property apportionment percentage. Divide Massachusetts total by worldwide total (from line 42c)
. . . . . .42d
43
Payroll
a. Total payroll
b. Payroll apportionment percentage. Divide Massachusetts total payroll by worldwide total payroll (from line 43a)
. . . . . .43b
44 Sales
a. Tangibles
b. Services (including mutual fund sales)
c. Rents and royalties
d. Other
e. Total sales
f. Sales apportionment percentage. Divide Massachusetts total sales by worldwide total sales (from line 44e)
. . . . . . 44f
45 Apportionment percentage. Add lines 42d, 43b and (44f x 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
46Massachusetts apportionment percentage. Divide line 45 by 4. Note: If an apportionment factor is inapplicable, divide by the
number of times each applicable factor is used (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
2020 FORM 3, PAGE 5
47Credits available
a. Taxes due to another jurisdiction (full-year residents and part-year residents only)
. . . .
.47a
b. Other credits (from Schedule CMS)
.47b
48
Credit recapture (from Schedule CRS)
.48
49
Gross receipts or sales (from Part 2, Federal Information, line 1a)
.49
50
Total income or loss (from Part 2, Federal Information, line 8)
51
Bad debts (from Part 2, Federal Information, line 12)
.51
52
Interest (from Part 2, Federal Information, line 15)
.52
53
Fill in if during the tax year the partnership had any debt that was cancelled, was forgiven, or had the terms modified
so as to reduce the principal amount of the debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
Investment interest expense (from Part 2, Federal Information, line 50b)
.54
2020 FORM 3, PAGE 6
Part 2. Federal Information
Income. From U.S. Form 1065.
Note: Include only trade or business income and expenses on lines 1a through 22. See instructions.5 Fill in oval if showing a loss 1a Gross receipts or sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
1b Returns and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b
1c Total. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c
Cost of goods sold (attach Form 1125-A)
. 2
Gross profit. Subtract line 2 from line 1c
. 3
Ordinary income or loss from other partnerships, estates and trusts (attach statement)
. 4
Net farm profit or loss (from U.S. Form 1040, Schedule F)
. 5
Net gain or loss (from U.S. Form 4797, Part II, line 17; attach U.S. Form 4797)
. 6
Other income or loss (attach statement)
. 7
Total income or loss. Combine lines 3 through 7
. 8
Deductions. From U.S. Form 1065. See instructions for limitations.
Salaries and wages (other than to partners; less employment credits)
. 9
Guaranteed payments to partners
Repairs and maintenance
Bad debts
Rent
14
Taxes and licenses
15
Interest
16a Depreciation (from U.S. Form 4562) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16a
16b Less depreciation reported on Form 1125-A and elsewhere on the return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16b
16c Total. Subtract line 16b from line 16a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16c
17 Depletion (do not deduct oil and gas depletion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18 Retirement plans, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
19 Employee benefit programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20 Other deductions (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
21 Total deductions. Add lines 9 through 20 (do not include lines 16a and 16b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
22 Ordinary business income or loss. Subtract line 21 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2020 FORM 3, PAGE 7
Part 2. Federal Information (cont’d.)
Cost of goods sold. From U.S. Form 1125-A (see instructions).
23 Inventory at beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
24 Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
25 Cost of labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
26 Additional IRC § 263A costs (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
27 Other costs (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
28 Total. Add lines 23 through 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
29 Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
30 Cost of goods sold. Subtract line 29 from line 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Other information. From U.S. Form 1065, Schedule B.
31Type of entity filing this return (fill in one):
Domestic general partnership
Domestic limited partnership
Domestic limited liability company
Domestic limited liability partnership
Foreign partnership
REIT
Other (specify) ____________________________________________________________________________________________________
32Fill in if at any time during the tax year any partner in the partnership was a disregarded entity, a partnership (including an entity treated as
a partnership), a trust, an S corporation, an estate (other than an estate of a deceased partner) or a nominee or similar person . . . . . . . . . . . . .
33 Fill in if this partnership is a publicly traded partnership as defined in IRC § 469(k)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34Fill in if during the tax year the partnership had any debt that was cancelled, was forgiven, or had the terms modified so as to reduce the
principal amount of the debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35Fill in if the partnership is making, or had previously made (and not revoked), an IRC § 754 election (see instructions for details regarding an
IRC §754 election.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36Fill in if the partnership made for this tax year an optional basis adjustment under IRC § 743(b) or 734(b). If Yes, attach a statement showing
the computation and allocation of the basis adjustment (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37Fill in if during the current or prior tax year the partnership engaged in a like-kind exchange or distributed any property received in a like-kind
exchange, or contributed such property to another entity (other than entities wholly-owned by the partnership throughout the tax year) . . . . . . .
Partners’ Distributive Share Items. From U.S. Form 1065, Schedule K.
Income or loss
5 Fill in oval if showing a loss
38 Ordinary business income or loss
39 Net rental real estate income or loss (from U.S. Form 8825) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
40a Other gross rental income or loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40a
40b Expenses from other rental activities (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40b
40c Other net rental income or loss. Subtract line 40b from line 40a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40c
41 Guaranteed payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
42 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
43a Ordinary dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43a
43b Qualified dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43b
44 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
45 Net short-term capital gain or loss (from U.S. Form 1065, Schedule D). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2020 FORM 3, PAGE 8
Partners’ Distributive Share Items (cont’d.)
. . . . . . . . . . . . . . . . . .46a Net long-term capital gain or loss (from U.S. Form 1065, Schedule D)
. . . . . . . . . . . . . . . . 46a
46b Collectibles (28%) gain or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46b
46c Unrecaptured IRC § 1250 gain (attach statement). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46c
47 Net IRC § 1231 gain or loss (from U.S. Form 4797) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
48 Other income or loss (see instructions). Type ______________________________________________________ 48
Deductions
49 IRC § 179 deduction (from U.S. Form 4562) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
50a Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50a
50b Investment interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50b
50c IRC §59(e)(2) expenditures. Type _____________________________________________________________
50c
50d Other deductions (see instructions). Type_______________________________________________________
50d
Other information
51a Tax-exempt interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51a
51b Other tax-exempt income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51b
51c Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51c
52a Distributions of cash and marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52a
52b Distributions of other property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52b
53a Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53a
53b Investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53b
53c Other items and amounts (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53c
Analysis of Net Income or Loss
54Net income or loss. Combine U.S. Form 1065, Schedule K, lines 1 through 11. From the result, subtract the
sum of U.S. Form 1065, Schedule K, lines 12 through 13d, and 16p . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Individual
Exempt
Nominee /
55 Analysis by partner type
Corporate
(active)
(passive)
Partnership
organization
other
a General partners . . . . .
b Limited partners . . . . . .
2020 FORM 3, PAGE 9
Balance sheets per books
From U.S. Form 1065, Schedule L.
Assets
56 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57a Trade notes and accounts receivable . . . . . . . . . . . . . . . . . . .
b Less allowance for bad debts . . . . . . . . . . . . . . . . . . . . . . . . .
58 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59 U.S. government obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
60 Federally tax-exempt securities . . . . . . . . . . . . . . . . . . . . . . . .
61 Other current assets (attach statement) . . . . . . . . . . . . . . . . . .
62a Loans to partners (or persons related to partners). . . . . . . . .
b Mortgage and real estate loans . . . . . . . . . . . . . . . . . . . . . . .
63 Other investments (attach statement). . . . . . . . . . . . . . . . . . . .
64a Buildings and other depreciable assets . . . . . . . . . . . . . . . . .
b Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . .
65a Depletable assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b Less accumulated depletion . . . . . . . . . . . . . . . . . . . . . . . . . .
66 Land (net of any amortization) . . . . . . . . . . . . . . . . . . . . . . . . .
67a Intangible assets (amortizable only) . . . . . . . . . . . . . . . . . . . .
b Less accumulated amortization . . . . . . . . . . . . . . . . . . . . . . .
68 Other assets (attach statement) . . . . . . . . . . . . . . . . . . . . . . . .
69 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities and capital
70 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– Beginning of tax year –
– End of tax year –
a.
b.
c.
d.
a.b.c.d.
71 Mortgages, notes, bonds payable in less than one year. . . . . .
72 Other current liabilities (attach statement) . . . . . . . . . . . . . . . .
73 All nonrecourse loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74a Loans from partners (or persons related to partners). . . . . . .
b Mortgages, notes, bonds payable in one year or more . . . . .
75 Other liabilities (attach statement) . . . . . . . . . . . . . . . . . . . . . .
76 Partners’ capital accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77 Total liabilities and capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 FORM 3, PAGE 10
Reconciliation of income or loss per books with income or loss per return
From U.S. Form 1065, Schedule M-1. Note: If filing U.S. Form 1065, Schedule M-3, you still must complete this section.
78 Net income or loss per books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
79Income included in Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10 and 11, not recorded on books this year attach
statement). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
80 Guaranteed payments (other than health insurance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
81 Expenses recorded on books this year not included in Schedule K, lines 1 through 13d and 16p (attach statement) 81
a Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81a
b Travel and entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81b
82 Add lines 78 through 81 (do not include lines 81a and 81b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
83 Income recorded on books this year not included in Schedule K, lines 1 through 11 (attach statement). . . . . . . . . . . 83
a Federally tax-exempt interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83a
84Deductions included in Schedule K, lines 1 through 13d and 16p, not charged against book income this year
(attach statement). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
a Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84a
85 Add lines 83 and 84 (do not include lines 83a and 84a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
86 Income or loss. Subtract line 85 from line 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
From U.S. Form 1065, Schedule M-2.
87 Balance as of beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
88a Capital contributed: cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88a
b Capital contributed: property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88b
89 Net income or loss per books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
90 Other increases (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
91 Add lines 87 through 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
92a Distributions: cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92a
b Distributions: property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92b
93 Other decreases (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
94 Add lines 92a, 92b and 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
95 Balance at end of year. Subtract line 94 from line 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Filing Massachusetts Form 3 represents an important step for partnerships operating within the state, guiding them through the process of reporting income and other financial details. The goal is to ensure both transparency and compliance with state tax laws. By carefully following the steps provided, partnerships can navigate the complexities of tax reporting, helping to avoid errors that might otherwise lead to penalties or additional scrutiny from the Massachusetts Department of Revenue. Below are straightforward, step-by-step instructions for accurately completing the form.
Steps for Filling Out Massachusetts Form 3:
It's important to accurately complete each section of the form and include any required attachments to ensure your partnership's return is processed efficiently. Maintaining a copy for your records is advised. Should questions arise during the filing process, consulting with a tax professional or the Massachusetts Department of Revenue may provide additional clarification and support.
What is a Massachusetts Form 3?
Massachusetts Form 3 is a tax document specifically designed for partnerships operating within the state. It serves as the annual return that such entities must file with the Massachusetts Department of Revenue (DOR). This form is used to report the partnership's income, deductions, gains, losses, and more for the tax year. The information provided helps in calculating the state tax obligations of the partnership. Both calendar year filers and fiscal year fillers utilize this form, inputting the relevant dates at the beginning of the document to indicate their specific reporting period.
Who is required to fill out Form 3 in Massachusetts?
Any partnership that conducts business in Massachusetts or earns income from sources within the state is required to complete and file Form 3. This includes entities treated as partnerships for federal income tax purposes, such as Limited Liability Companies (LLCs) that have not chosen to be treated as corporations. Moreover, if a partnership has more than 25 partners, it's mandated to file this return electronically, in line with the directive in TIR 09-18.
What information do I need to provide in Form 3?
When completing Massachusetts Form 3, a partnership must provide comprehensive details about its income, expenses, and other relevant financial activities over the tax year. Essential information includes the name and address of the partnership, Federal Identification Number (FID), principal business activity, and the accounting method employed. Additionally, the form requires details about the partnership's assets, any amendments to the return, reasons for filing, and the income apportionment percentage. Specific schedules may also need to be attached, including Schedule 3K-1 for each partner.
How do I determine the tax year to report on Form 3?
Partnerships filling out Form 3 must report their income based on their designated tax year. Calendar year filers should input January 1, 2020, as the tax year's beginning and December 31, 2020, as its end. However, if the partnership operates on a fiscal year basis, it must instead list the appropriate beginning and ending dates that define its fiscal year. This clarity ensures that the income and deductions are correctly aligned with the specific period in which they were earned or incurred.
Can I file an amended Massachusetts Form 3?
Yes, partnerships can amend previously filed Form 3 returns if they need to correct any information or report changes such as federal adjustments. To file an amended return, the partnership should mark the option indicating an "amended return" on Form 3 and include a detailed explanation of the reasons for amendment. Additionally, if the amendments result from federal changes, documentation supporting these adjustments must be appended.
Filling out tax forms accurately is crucial to ensure compliance with tax laws and to avoid unnecessary errors that can lead to delays or additional liabilities. The Massachusetts Form 3, used by partnerships for state tax filing, is no exception. Below are ten common mistakes people make when completing the Massachusetts 3 form, which can have potential consequences on the processing of the tax return.
Ensuring accuracy on each part of the Form 3 not only maintains compliance but also minimizes the risk of audit and financial discrepancies in the partnership’s tax obligations. Taking the time to review these common errors and consulting with a tax professional if unsure can save a significant amount of time and effort in the long run.
When preparing and submitting the Massachusetts Form 3, partnerships may find it necessary to include additional forms and documents to ensure a comprehensive and accurate tax filing. This inclusion aids in the detailed reporting of a partnership's financial activities, adjustments, and specific tax treatments that are pertinent to their unique business operations.
Together with the Massachusetts Form 3, these documents facilitate a thorough and precise rendering of a partnership's tax responsibilities. Each form addresses different aspects of the partnership's financial and operational status, aiding in the transparent and efficient assessment of state tax obligations. It's important for partnerships to review their requirements carefully and furnish all necessary documentation to comply with Massachusetts tax laws fully.
The Massachusetts 3 form is similar to the U.S. Form 1065 in several aspects. Both forms are designed for reporting income and deductions of partnerships to governmental tax authorities. They share similar sections such as reporting ordinary business income or loss, detailing the partnership's principal business activity, product or service, and specifying the federal identification number. Additionally, each form requires information on the distribution of income to partners, with the Massachusetts 3 form including Schedules 3K-1 and the U.S. Form 1065 using Schedule K-1 for this purpose. This common structure facilitates the process for partnerships to report their financial activities consistently at both the state and federal levels.
Another document the Massachusetts 3 form resembles is the U.S. Form 8825, "Rental Real Estate Income and Expenses of a Partnership or an S Corporation". This similarity exists because both forms require detailed reporting of income and expenses related to rental real estate activities. The Massachusetts 3 form, through its instructions and specific lines on income and adjustments, parallels the comprehensive approach of Form 8825 to gather information on rental income, expenses, and net income or loss from real estate operations. This alignment ensures that partnerships engaging in rental real estate ventures can accurately report their financial outcomes as part of their broader tax obligations.
When preparing to fill out the Massachusetts 3 form, it's important to keep several key guidelines in mind to ensure the process goes smoothly and accurately. Below are four essential do's and don'ts to consider:
When it comes to filing taxes, understanding the specifics of forms like the Massachusetts Form 3 is crucial for partnerships operating within the state. However, there are several misconceptions that can confuse or mislead people. Here are ten common misconceptions about the Massachusetts Form 3 and explanations to clarify them:
Only large partnerships need to file Form 3. In reality, any partnership doing business in Massachusetts or receiving income from Massachusetts sources is required to file Form 3, regardless of its size.
Partnerships can choose any color ink to fill out Form 3. The form specifically instructs that it must be filled out in black ink to ensure legibility and proper processing.
The form is the same for every type of partnership. While the form is standardized, certain sections may be applicable to specific types of partnerships, such as investment partnerships, and different information may be required based on the partnership’s activities and tax situation.
Filing Form 3 automatically complies with all tax obligations. This is untrue as there may be additional forms and schedules required depending on the partnership's activities, investments, and any credits or deductions claimed.
Electronic filing is optional for all partnerships. Partnerships with more than 25 partners are required to file electronically, as specified by TIR 09-18, to streamline processing and reduce errors.
Form 3 is only about reporting income. While reporting income is a significant part of the form, it also covers other important information such as the partnership’s activities, accounting method, and changes in partnership structure.
Form 3 does not require detailed financial information. Despite a common belief to the contrary, the form requires detailed financial information, including total assets and specific types of income, to accurately assess the partnership's tax obligations.
Amendments to Form 3 can be made informally. If a partnership needs to amend its Form 3 due to a federal change or for another reason, it must fill in the specific section indicating that the return is amended and provide the reason for filing the amended return.
All partnerships must complete the entire form. Not all sections of Form 3 apply to every partnership. For example, certain sections are specifically for partnerships that have elected out of the federal centralized partnership audit regime or are engaged exclusively in certain activities.
There is no need to specify the accounting method on the form. The form has a specific section (Section H) for indicating the accounting method used by the partnership, which is crucial for ensuring accurate and consistent tax reporting.
Understanding these key aspects of the Massachusetts Form 3 can help partnerships avoid errors and ensure compliance with state tax obligations. It's always a good idea to seek professional advice or consult with the Massachusetts Department of Revenue for specific filing guidance.
The Massachusetts 3 Form, also known as the Partnership Return, is an essential document for partnerships operating within the state to detail their income, gains, losses, deductions, and credits for the tax year. Key takeaways regarding the completion and submission of this form include:
Compliance with these directives ensures accurate and timely filing, aligning with Massachusetts Department of Revenue requirements and supporting the partnership's overall tax management strategy.
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