One of your clients, Texas, Inc., is considering electing S status. Both of Texas's equal shareholders paid

Question:

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 2013, 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? Explain.
2013 ......... $40,000
2014 ......... 25,000
2015 ......... 25,000
2016 ......... 25,000