Which of the following will prevent a corporation from qualifying as an s corporation? a. deriving more than 40% of its gross receipts from passive income sources. b. having a partnership as a shareholder. c. owning more than 50% of the stock of a domestic corporation. d. having 100 shareholders.

Having a partnership as a shareholder.

Explanation:

An S corporation or an S sub-chapter is a small business corporation that has been allowed by the Internal Revenue Services(IRS) to file its tax as a corporation. IRS recognizes an S corporation as a legal form of business ownership. An S corporation may elect to pass its income and losses deductions directly to the shareholders for federal tax purposes.

For a small business corporation to qualify as an S corporation, it must meet specific requirements. Some of the requirements include

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