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What is included in OAA? The Other Adjustments Account in S Corporations

According to the IRS, the Other Adjustments Account (OAA) is a crucial part of S corporation accounting, designed to track items that affect a shareholder's basis but are not included in the Accumulated Adjustments Account (AAA). It serves a distinct purpose in ensuring proper accounting for tax-exempt income and related expenses, which ultimately influences the tax-free portion of certain distributions. Knowing **what is included in OAA** is essential for any S corporation shareholder to accurately calculate their stock basis.