You previously provided tax advice to Chandler and Monica Bing, owners of Bing Bakery, Inc. (Bing), related to their newly created corporation, Bing Bakery, Inc. (Bing). Since you did such a thorough job before, they are seeking additional tax advice from you now.
As a reminder, on May 17, 2021, Chandler and Monica Bing incorporated and began operating Bing Bakery, Inc. (Bing). Bing sells various baked goods online to customers throughout the U.S. Bing’s mission is to provide high quality baked goods to customers in a convenient manner without sacrificing taste and freshness. Monica leads the operations side of the business as the head chef, and Chandler leads the administrative side of the business as the CEO of the company.
It is now June 15, 2021, and the Bings are trying to determine if an S election should be made for Bing or not. They have heard that if an S election is desired that it needs to be made by a certain date in order to be effective for the current year. As a result, they have come to you with the following thoughts/questions: