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Should red lotus make an s election

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Reference no: EM132937959

Question - One of your clients is considering electing S status. Red Lotus, Inc. is a six-year-old manufacturing comapney with two equal shareholders., both of whom paid #30,000 for their stock. Goind into 2021, Red Lotus holds a $110,000 NOL carryforward. Estimated income is $40,000 for 2021 and $25,000 for each of the next three years. Should Red Lotus make an S election for 2021? Why or why not?

Reference no: EM132937959

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