This module is a thorough introductory examination of Schedules K and M-1. The material focuses primarily on calculating the schedules K and M-1 for pass-through entities, and the application of Schedules K-2 and K-3. Key exceptions to K-2 and K-3 reporting, including the domestic filing, §1116, and small business exceptions, are addressed. The learning transfer for this module is primarily delivered through the various exercises and a case study. There is a CPA exam-style multiple choice quiz that covers the majority of separately stated items and book-to-tax differences that a tax preparer will encounter. There are also discussion questions and a case study that will provide comprehensive challenges for the participants.