If an S corporation's beginning balance in OAA is zero,and the following transactions occur,what is the ending OAA balance? Depreciation recapture income $21,000 Payroll tax penalty 4,200 Tax-exempt interest income 5,300 Nontaxable life insurance proceeds 5,100 Life insurance premiums paid (nondeductible) 2,800

Question

If an S corporation's beginning balance in OAA is zero,and the following transactions occur,what is the ending OAA balance? Depreciation recapture income $21,000 Payroll tax penalty 4,200 Tax-exempt interest income 5,300 Nontaxable life insurance proceeds 5,100 Life insurance premiums paid (nondeductible) 2,800 ​

Quizplus · Accepted Answer

The ending OAA balance is calculated by adding tax-exempt interest income and nontaxable life insurance proceeds, then subtracting nondeductible life insurance premiums: $5,300 + $5,100 - $2,800 = $7,600. Depreciation recapture income and payroll tax penalty do not affect the OAA.

If an S Corporation's Beginning Balance in OAA Is Zero,and