Discussion Question $12-12($LO$.1,11)$

One of your clients is considering electing S status. Texas, Inc., is a six$-$year$-$old manufacturing company with two equal shareholders, both

of whom paid $$30,000$ for their stock. Going into $2022,$ Texas holds a $$110,000$NOL carryforward. Estimated income is $$40,000$ for $2022$

and $$25,000$ for each of the next three years.

From the perspective of the NOL, should Texas make an S election for $2022?$