One of your clients, Texas, Inc., is considering electing S status. Both of Texas's equal shareholders paid $30,000 for their stock. As of the beginning of 2017, Texas's Subchapter C NOL carry-forward is $110,000. Its taxable income projections for the next few years are as follows. Will you counsel Texas to make the S election? Explain.
2017 ..................................... $40,000
2018 ...................................... 25,000
2019 ...................................... 25,000
2020 ...................................... 25,000