Final answer:
The statement regarding differences between Schedule M-1 and M-3 based on the inclusion of dividends received and net operating loss deductions is false; the primary difference is actually in the level of detail required and the size of the corporation.
Step-by-step explanation:
The statement that one of the differences between Schedule M-1 and M-3 is that the M-3 reconciliation includes the dividends received and net operating loss deductions and M-1 does not is False. Both schedules are used to reconcile financial book income to tax income, but they do so with different levels of detail and for different sizes of corporations. Schedule M-1 is typically used by smaller corporations with total assets under $10 million, while M-3 is used by larger corporations with total assets of $10 million or more. The main difference is the level of detail required, with M-3 providing more in-depth information on the reconciliation items.