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

question 105

Multiple Choice

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

• A)$1,300
• B)$7,600
• C)$23,300
• D)$27,500
• E)None of the above

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Definitions:

Letterhead

The heading at the top of a sheet of letter paper, usually consisting of a name and an address, and often a logo.

Limited Partner

An investor in a partnership who is not directly involved in its daily operations and whose liability is limited to the amount invested.

Capital Contribution

Funds or assets provided by owners or shareholders to increase a company's equity.

Partners' Interests

Refers to the stakes or shares that partners have in a partnership, encompassing financial investment, management decisions, and profit-sharing.