Which statement is true regarding S corporations and shareholders?

The statement regarding S corporations and shareholders that is accurate is that S corporations must have U.S. citizens or residents as shareholders. This requirement is part of the eligibility criteria for S corporation status under the Internal Revenue Code. The S corporation election allows corporations to pass income, losses, deductions, and credits through to shareholders for federal tax purposes. To maintain this pass-through taxation feature, the IRS stipulates that shareholders must be individuals, estates, or certain trusts, and importantly, they must be U.S. citizens or residents.

This requirement ensures that the benefits of S corporation taxation remain within the priorities of U.S. taxation laws and support the concept of local ownership.

Other options are not aligned with the regulations governing S corporations. For instance, capital contributions alone do not constitute a shareholder's entire basis, as it also includes adjustments for income, losses, and distributions. S corporations are restricted to one class of stock, although they may have voting and non-voting shares, which complicates the concept of having multiple classes. Additionally, S corporations are limited to a maximum of 100 shareholders, rather than being required to have more than 100, as indicated in the incorrect options.