What is the maximum number of shareholders allowed for an S Corporation to qualify for Section 6166?

To qualify for Section 6166, which offers an estate tax deferral for closely held businesses, an S Corporation must adhere to specific criteria, including limitations on the number of shareholders. The correct maximum number of shareholders for an S Corporation is less than 100. This allows the corporation to maintain its status as a passthrough entity for tax purposes, which is a critical factor in the context of estate planning and tax deferral.

The specified number of shareholders is significant because it ensures that S Corporations are typically smaller businesses, which aligns with the objectives of Section 6166 to support family businesses and similar entities in managing their estate tax responsibilities. In this case, while less than 50, 30, and 45 shareholders are all limits that could be considered, they are not accurate in this context as the actual statutory limitation is less than 100 shareholders. Therefore, none of those figures reflect the stipulation set forth by the IRS for S Corporations under Section 6166.