A Qualified Small Business (QSB) is:(i) a domesting C corporation;
(ii) with gross assets that don’t exceed $50M;
(iii) which agrees to submit such reports to the IRS and shareholders as the IRS may require; and
(iv) satisfies the active business requirement.
The active business requirement is met if the corporation uses at least 80% of its assets in the active conduct of qualified trade or businesses. Qualified trades or businesses generally do not include services businesses (law, etc.), oil and gas businesses, banking or investing, motels and similar businesses.