Determine S Corporation Eligibility And Elections Practice Test

You are preparing a year-end eligibility memo for Blue Harbor, Inc., a domestic corporation with 85 shareholders. One shareholder is a single-member limited liability company (LLC) that is disregarded for federal tax purposes and owned by a U.S. citizen. Under IRC §1361, which shareholder type is ineligible for S Corporation status?

You are the CPA for Summit Peak, Inc., a domestic corporation with 120 individual U.S. citizen shareholders and one class of common stock. Management asks whether it can qualify as an S Corporation under IRC §1361 and elect under IRC §1362. What is required for Summit Peak to qualify as an S Corporation?