Because you soon will have completed the Federal Taxation Course for Business at Cincinnati State, two of your long-time friends recently approached you for guidance concerning a new business venture they plan to form. They expect the business to generate a loss of approximately $50,000 during its first year of operations, and profits close to $100,000 annually thereafter. Both individuals will be active participants in the business. They want to know what type of entity they should choose: a C corporation; S corporation; or a Partnership.Choose one of these three entity types (LLC is not a choice) as your recommendation and support your answer, stating the advantages and disadvantages of that entity. Include in your discussion how the first-year loss and subsequent years’ income generated by the business will affect the business associates’ personal taxes. If you make any assumptions about the business, please indicate. There is no right or wrong answer.Your grade will be based on the following:• Technical accuracy of information supplied 10 _____• Clear, concise, support of your position 5 _____• Instructions followed, sentence structure, grammar 5 _____Your paper should be at least two pages in length, typed: Times New Roman, Font size 12, double space, with normal margins. Use complete sentences, as you will be graded for grammar.

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