Which of the following is not a requirement for S-Corporation election?

The correct answer, which is that being an international entity is not a requirement for S-Corporation election, reflects the specific regulations governing S-Corporations. To qualify for S-Corporation status, a corporation must meet several requirements set forth by the Internal Revenue Service (IRS). However, one of the stipulations is that the corporation cannot be an international entity; it must be a domestic corporation, meaning it is created or organized in the United States.

In contrast, the requirement about having fewer than 100 shareholders is crucial because an S-Corporation can only have up to 100 shareholders to maintain its tax status. Similarly, having only allowable shareholders, which include individuals, certain trusts, and estates, is essential because there are restrictions on who can be a shareholder in an S-Corporation. Lastly, designating only one class of stock is important in order to preserve the pass-through taxation feature that is beneficial for S-Corporations, as it prevents disparities in distributions among shareholders.

Therefore, being an international entity does not apply, as S-Corporations must be organized as domestic entities, and this is why that choice is correct.