Question: For each of the following separate cases, recommend a form of business organization. With each recommendation, explain how business income would be taxed if the owners adopt the form of organization recommended. Also list several advantages that the owners will enjoy from the form of business organization that you recommend.
a. Milan has been out of school for about six years and has become quite knowledgeable about the residential real estate market. He would like to organize a company that buys and sells real estate. Milan believes he has the expertise to manage the company but needs funds to invest in residential property.
b. Dr. Langholz and Dr. Clark are recent graduates from medical residency programs. Both are family practice physicians and would like to open a clinic in an underserved rural area. Although neither has any funds to bring to the new venture, an investor has expressed interest in making a loan to provide start-up funds for their practice.
c. Ross, Jenks and Keim are recent college graduates in computer science. They want to start a Website development company. They all have college debts and currently do not own any substantial computer equipment needed to get the company started.