Certain closely held C corporations and personal service corporations
A closely held C corporation or personal service corporation shall be treated as materially participating in an activity only if—
(A)#
1 or more shareholders holding stock representing more than 50 percent (by value) of the outstanding stock of such corporation materially participate in such activity, or
(B)#
in the case of a closely held C corporation (other than a personal service corporation), the requirements of section 465(c)(7)(C) (without regard to clause (iv)) are met with respect to such activity.