Indicate in each of the following independent situations whether the taxpayer can accomplish

what is proposed. Provide adequate authority for your answer including any special elections

that are needed or requirements that must be satisfied. Assume all individuals use the

calendar year as their tax year unless otherwise indicated.

a.

Will and Carol form Classic Corporation. They want the corporation to adopt a fiscal year

ending 1/31 as its tax year to provide a maximum deferral for their income. The

corporation makes an S election for its initial tax year ending 1/31/2021

b.

Mark and Dennis have owned and operated the Plastic Corporation for several years.

Plastic has used a fiscal year ending 6/30 since its organization as a C corporation

because it conforms to the corporation's natural business year. The corporation makes

an S election for its tax year beginning July 1, 2020