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 2019, Texas’s Subchapter C NOL carryforward is $110,000. Its taxable income projections for the next few years are as follows. Will you counsel Texas to make the S election in 2019? Explain. 

2019..............$40,000 

2020................25,000 

2021.................25,000 

2022.................25,000