Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?
A) Payroll penalty.
B) Unreasonable compensation.
C) Life insurance proceeds (nontaxable to the recipient S corporation).
D) Taxable interest.

Question

Quizplus · Accepted Answer

Life insurance proceeds that are nontaxable to the recipient S corporation are reported in the Other Adjustments Account on an S corporation's Schedule M-2, as they affect the corporation's accumulated adjustments account but are not taxable income.

Which Transaction Affects the Other Adjustments Account on an S