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Officer life insurance for S Corporation on Schedule M-2

Per Revenue Ruling 2008-42, premiums paid by the S Corporation on an employer-owned life insurance contract, which it owns and is a beneficiary of, doesn't reduce the S Corporation's Accumulated Adjustment Account (AAA).
Although the Revenue Ruling doesn't explain its reasoning, it would seem that even though no deduction is allowed for premiums paid on any life insurance policy where the taxpayer is directly or indirectly the beneficiary, the nondeductible expense doesn't reduce the S Corporation's AAA because it's related to tax-exempt income. Therefore, UltraTax CS transfers amounts entered in the
Officer life insurance premiums
 fields (Ms screen, located under the
Balance
 folder) to the OAA - Other reductions.
If you don't want officer life insurance premiums to transfer to the Other Adjustment Account, enter the amount in the
Book expenses not deducted
 statement window, located on the Ms screen under the
Balance
 folder, and enter the desired code in the
Schedule M-2
 column.
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