First a little about genetics to help you understand how color is or isn't inherited. Please Note I am not an expert on genetics and this is not my work, this work is credited to Chris Davis and comes from what I have learned from reading the article "whats in a color" which I found on the internet, unfortunately I could not find the link again to use the article in depth so am using  excerpts from the article that I hope you will find useful. Along with the help of the article fellow breeders, my own experience both with past breeding of horses, and my years of dog breeding, it has helped me to compile some information you should find both useful and informative.

On a simplified scale...
If a genetic trait is recessive, a dog needs to inherit two copies of the gene for the trait to be expressed, or seen. Therefore, both parents must be carriers of a recessive gene in order for an offspring to express or show that genetic trait. If both parents are carriers, then there would be a 25% chance that, that offspring would express that trait.

Double Recessive:
If a dog expresses a  color known to be recessive, then they  inherited the gene from both parents making it double recessive and if that dog is bred to another dog that also expresses the same recessive color then that color will always “breed true”, meaning they will only produce puppies of that same color. For example a Black & Silver (double recessive) bred to same  will only have Black & Silver puppies because the only genes the parents can  contribute are Black & Silver. The recessive genes will always “mask” or override dominant genes when inherited from both parents.

If a genetic trait is dominant in a dog it only needs to inherit one copy of the gene for the trait to be expressed. The dominate gene can be “masked” by the doubling of recessive genes. For example, all Mini Schnauzers carry the genes to be Salt & Pepper but if they inherit the genes to be White from both parents, the Salt & Pepper is covered or “hidden” and the dog’s coat will be White.

Simple Dominant:
This means that if one gene is present it will manifest fully, and if two are present it manifests no differently than with one. for Example take a Salt and Pepper Female with no White gene  carried bred to a White male. Since she has no White gene and he had a masked Salt and Pepper gene, the resulting puppies will all be Salt and Peppers ( the puppies however will also all carry for the white gene as well ), providing however no other matching recessive genes are carried or passed on by either of the parents.

Dominant Direct Inheritance:
Genes that are dominant direct inheritance cannot be "hidden" or “carried”. They must be directly inherited from a parent. They cannot “skip” a generation. An example is a puppy that is “One Color”  one of the parents must also be “One Color” (not necessarily the same base color).

Homozygous means that they have doubled up dominant genes thus ensuring they can produce no other color. For example homozygous “One Color” Black, meaning all puppies from this dog will be Black. One cannot ensure “One Color” Chocolate because brown-base is itself recessive, thus requiring the brown-base recessive gene from both parents, recessive genes cannot be homozygous. In order for a pup to be homozygous for a color, both of the homozygous dog’s parents have to be that color, but the flipside is not true…just because both of a dog’s parents are Black, it does not necessarily make the dog homozygous. The exception to this is if the dog’s parents are both homozygous themselves, then all their offspring must be homozygous.

Heterozygous is the opposite of homozygous. It means that the dominant gene is not doubled up and the dog is carrying “hidden” or recessive gene(s), which can be expressed in the proper mating.
To further complicate matters, the various color genes, called alleles are carried on a DNA strand in specific spots called Locus (plural loci) like notches on a stick. So this means that one dog can have several different “notches” on their DNA stick and it is not just a matter of whether they have this gene and not that one, but also how the different genes affect one another. For example, let’s say we have a Black dog that is heterozygous for the color black (K) genetically on the DNA strand and also not black (k) on the DNA stick..So our Heterozygous Black dog is Kk at the locus or “notch” for black. Bred to another heterozygous Black,
so obviously the possible combinations are 25% homozygous Black, 50% heterozygous Black and 25% not Black. So if the dog is not Black, what color is it? This is where the other “notches” come into play. The dog will have other genes to determine what color they will be when they are not another color.
All Miniature Schnauzers carry for Salt & Pepper, however it can be masked or hidden by other genes, and when the other genes fail to be expressed, then the S&P gene fulfills the need.
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No Color Double Reccessive
White- also called a black-nosed white, or a "true white".
( This color has been documented through written description and photographs from the beginning, and is accepted as a purebred without question in it's native country Germany, as well as several other countries.) This gene actually prevents the expression of color, rather than being a color itself.
White chocolate" or a "brown-nosed" white, this is genetically the same coat as the black-nosed white, only the base color differs.

One Color Dominant Direct Inheiritance
Black- coat color of black-based one color reflects the skin color making the coat color black.

Liver- or what is also known as "chocolate" once again the coat  color reflects the skin color on this one color. The shades can vary but the gene responsible for making this a one color is the same as that in the black.

Bi Color Double Reccessive
Black and  Silver - The Black & Silver is the Schnauzer equivalent to the Black & Tan in other breeds (ie. Rottweiler, Doberman) and most likely comes from the Miniature Pincher in it's ancestry. It should be noted however that the Schnauzer has a somewhat unique gene called the Chinchilla gene which changes the reddish hue of the "tan" points to the silvery color displayed by Schnauzers. Black & Silvers with very light points, to the point of being nearly white are also known as "phantoms".

Liver and Tan - or what is also known as "Chocolate Phantom" this is the bi colored gene displayed on the brown base. The "tan" points can range from a creamy, almost white color to a deeper nearly as dark as the chocolate of the main body color.

Banded Default or Dominant Color
Salt and Pepper- the most common known color for the Miniature Schnauzers. This is the color they  are when they do not inherit any of the recessive or direct inheritance genes from their parents. The shades can vary but the one defining trait of this color is the "banding" of color on the wirehairs. Upon closer inspection of the wirehairs when long, there is a distinctive banding or striping of lighter and darker coloration. The darker coloration will correspond with the base color, in this case black

Liver Pepper- the banded gene as it corresponds with the brown base.
(the title is somewhat misleading and confusing since there is no black "pepper" color involved. It would be more accurately known as a "frosted chocolate" to describe the "frosted look the banded hairs give the overall coat.)
Of special note: "banded" coat colors regardless of the base, also have the same Chinchilla "points" as the Black & Silvers at their eyebrows, checks, muzzle/beard, chests, lower legs, and under the tail.
Base Colors:
Black and Brown- The base color of the dogs is always reflected in the color of the nose and pads. These base colors have been in existence since the beginning of the breed and have been well documented, at least in the beginning.. The first studbook of recorded Miniature Schnauzers lists a number of dogs, including at least one from the first recorded litter as being "gelb" German for yellow. The Yellow coloring is directly related to the Brown base and the Yellow coat coloring is simply a difference in the way the color is deposited in the hair follicle. The claim that the Brown base is a "new" color and therefore not purebred is inaccurate. As it is recessive, it is possible to pass the gene on for generation after generation without it showing up and further, the very, very dark Brown based, One Color, Chocolate dogs can look almost Black and could easily be accidentally misidentified and registered as such, further continuing the genetic line. It has also been proven that there have been many breeders who have "disposed of" or purposefully misidentified the coloring of the "differently" colored dogs just to preserve " their personal integrity " among the circles they turn in.

No Color:
(Recessive) True 'No Color' or White puppies are always born with predominantly pink pads, lips, eye rims, noses and skin and completely White fur. The lips, pads, noses and eye rims will quickly change to reflect the base color, black or brown. There are some dogs which upon maturity appear White but these are not true Whites. They are born a light tan color and as they age they fade more and more until they appear White (note the progression of color change in the first series of pics below). As puppies these are sometimes described as Wheaten or Platinum/ Platinum Silver. They will also sometimes seem to have pink-ish on the nose and perhaps even on the pads if they will have white markings on the toes, but this is not to be confused with the true pink of a White puppy. The "false white" appears to be a Dominant Direct Inheritance gene, needing one parent of that color to be passed.
False White, Wheaten, Platinium Silver
True No Color White

One Color: (Dominant Direct Inheritance)
Pups with the One Color gene will always be the color of the base color so their genetic color will always be the same as their nose/pads color.
Other genes can alter the shade and therefore color is not simply determined by the single gene alone. A One Color gene dog can look very different from another, one color dog . There are genes that can determine how much ,when, and where a dog  will fade and what color they will fade to. Below you will see a variety of Black base, One Color gene dogs that appear different based on the genes controlling shade/fade. As you can see many of these Blacks have colors other than Black in their coats, and fading can be minimal or complete of the entire coat.

It should be noted that the genes responsible for fading often don’t start to affect coat color until some time after birth and how quickly or even if a dog fades cannot be determined at birth, or even necessarily by 8 weeks. Also there was a time period when in Germany the only registerable Black Miniature Schnauzers had to both have Black parents, this resulted in Homozygous Black dogs. Some of these were later imported into North America and are responsible for a large infusion of Black into the lines there.

Bi-Color: (Recessive) The Bi-Color gene is what makes a Black & Silver or a Liver & Tan and is the same gene responsible for the Black & Tan in other breeds. As mentioned before, the Schnauzer has what is known as the Chinchilla gene, which converts the “Tan” points to the silvery or white color the Schnauzer displays. Once again other genes are responsible for how dark or light the points and body appear and what, if any fading occurs. The wire hairs of Bi-Color dog are the same as the Base color.

Banded: (Dominant) The Banded coat is the most commonly known Schnauzer color. It is also the color Schnauzers are when no other genes come into play making it a kind of “default” color. The defining characteristic of the Banded gene is the distinct banding or striping of the wirehairs. Depending on the point of growth of the wirehair, the hair will appear white, dark or a combination of both. The dark color always corresponds with the Base color. Again, other genes affect the shade of the Banded coat and this clearly seen in the pictures of the Black-base, Banded coat (Salt & Pepper) dogs below. Banded coat puppies are often born with various amounts of a tan shaded coloration to their coats (see ears on top right photo) that most often fades out as they age, although on occasion it doesn’t fade entirely. This is normal and is even noted in the breed standard of CKC and AKC registration paperwork.
Parti-Color: (Recessive) The Parti–color gene. separate from the other color genes since it can be displayed simultaneously with them and is a “pattern” gene also known as a “broken color” gene. There have been recorded Parti-Colored Miniature Schnauzers in this country as far back as the 1950’s and can be traced directly to some of the well known and respected German Kennels. The Parti coloring can be seen as big “saddles” of color on a white background or as a “splattering” of colored freckles on the white background, or more commonly, both. It also needs to be said that you can have White Parti-colored dogs but you won’t see the Parti due to the White disguising it. You won’t know you have Parti until you breed to another non- white Parti or Parti gene carrier and get Parti puppies.
Gene Combinations: All schnauzers have a combination of these genes discussed above. Each one has a Base color gene, a Coat pattern gene and an optional Parti pattern gene. Whether these are displayed or not sometimes depends on whether the gene is "turned" on or off. Like in the case of Black, as a dominant gene it is either inherited as Black or Not Black. With the recessive genes it is a matter whether or not two matching gene pairs are inherited, one from each parent.

In Conclusion: I hope this helps clear up some of the confusion regarding the colors. I also want to be sure to make it clear that to say that the non-standard colors are “not recognized” by the AKC is not accurate. They most certainly are recognized otherwise they would not be able to be registered as purebred Miniature Schnauzers. They are registerable and recognized, simply not able to be shown in the conformation classes. They can still participate in Agility, Obedience and Search and Rescue. Just so that is clear to all. Thank you for taking the time to read this. I hope it was informative.
Though the majority of photos used are of my own dogs/ puppies, I have been given permission from outside sources to use some other breeders photos. In closing I would like to give much Thanks to Beth Nelson for use of her chocolate white pup photo and Micheala S for her freckle photo. Also Much thanks to my friend Prue Whitaker for use of several of her pups photos. All  these ladies also specialize in breeding wonderful toy miniature schnauzers as well.

Freckles: As seen on the parti patterned miniature schnauzer, note they can be heavily freckled such as is the case with the above dog or very lightly freckled to none at all.
Salt and Pepper Parti
Black Parti
Platinium Parti
Liver Parti
The Confetti Schnauzer: what is a merle shnauzer?

The first merle schnauzer was created in 2006 known as "Designer's Miss Baby Blue" she was owned by Crystal Costopoulos of Designer Puppys and was 100% AKC blooded. She is the creator of the breed now known as "Confetti Schnauzers". The name however has nothing to do with the color. The name merely refers to the breed cross. She chose to create this cross after a former client of hers Janelle Newby had created the merle cross using a pomeranian with the merle gene. She fell in love with the looks but decided to seek out what she felt was the perfect cross best suited to the miniature schnauzer that would be a 100% AKC registered. The dog of choice was the miniature Aussie. She was the first person to begin a new registry for the Merles. After much encouragement from AKC,APRI, and other registrys she started a Parent Club for the Merles. All dog breeds have a Parent Club which sets the breed standard for each breed. The MSCA is like the AKC, or CKC for the Merle Schnauzers.

The long and short is : The Confetti Schnauzers are a new breed. For those who may have a problem with this and want to snub their noses at them. All one has to do is take a look back at history. Almost all dog breeds if you trace back far enough in history are carefully comprised of cross breeds. The only difference is that you are seeing this happen in this day and age, verses back in history sometime!!
Once the cross bred is introduced to bring in the merle gene it is not used again and is then bred out of the gene pool. Some breeders would have you believe that the first generation is a full schnauzer however it is not. The first generation is 50/50%  second generation 75/25%  third generation 84/16%  fourth 92/8%   and by the fifth generation you have a 100% AKC or CKC Miniature Schnauzer.
Some breeders are crossing with pomeranians and other breeds to get the merle cross. I have loved the Confetti Schnauzer since I saw my very first one like many people. When I decided to add this to my breed pool I did alot of research on the internet before choosing one that I felt best represented the true schnauzer. I liked the Confetti's that Crystal Costopoulos produced over any others I had seen on the internet, however it was not possible to import one from her to my location. I was very dissapointed to find this out.  Imagine my delight when I find out, that my long time friend whom I have relied on for years to get my breeding stock from, that not only does she own a stud that has lineage carrying the very bloodlines that Crystal C started her merle schnauzers from. But, has several litters of confetti schnauzer puppies available for sale sired by him, as well. I chose from them Blondie for her overall conformation, coat, pretty face,  and expected final size and weight outcome. She was also chosen for the fact that she was a 5th generation making her a 100% miniature schnauzer.

The Merle Gene :

The merle gene is a dilution gene. It not only dilutes the coat of the dog, but the eye color as well. It does not however dilute evenly but in patches, giving a very mottled or speckled look.
It can turn the eyes of the dog a blue color , or give them tiny specks of blue. It is important to note that it does not affect the dogs eyes sight in anyway. Also of note that blue eyes are not neccessarily an inheiratable trait. It also dilutes noses and paw pads giving patches of pink leaving the rest the base coat color of black or brown. The merles typically have a lot of white markings such as white legs, under belly and around the neck. When breeding the merles the off spring will typically be 50% merle/50% non merle. Of special note one should never cross two merles as 25% of them will come out deaf and or blind, with no increase in the merles produce, therefore absolutly no gain is to be made from crossing two merles.

The Confetti Schnauzer is registered with the Merle Schnauzer Club of America. They have under their registry 3 categorys:

I won't go into specific detail as to all the classifications required for the dogs that are required to fit them into each category, and how they are ranked within the registry, if you wish to know this please visit the site. These are really only important if you are registering breeding stock within the registry and breeding. The MSCA follows the same guidlines for registration as would the AKC or CKC as far as registration goes. I can tell you that under the Solid as far as acceptable colors are exactly  the same as the examples shown and  listed above, with the addition of possibly more white markings. Under the Parti you would find the same color classifications as the samples I have listed above as well, with the addition of these colors with the merle gene included. In other words where you would find the color you would also find the merle patterning on the coat as well. Under the Merle you will find all the colors as listed above, the only difference you will find is that they will have the merle patterning on the coat, possibly the eyes, plus usually more white markings.
I will be adding photos to depict the colors as soon as they become available to me to use for examples.