1. A and B purchase unimproved land as cotenants. In each of the following alternatives, determine whether A and B have created an entity for tax purposes: a. They hold the land for appreciation; b. They lease the land to Z who uses the land for farming; c. They construct a motel on the land and hire C to manage the motel for them. 2. A, B and C have decided to leave their current positions as software designers in a large company and to start up their own firm. A and B have been very successful and are now quite wealthy. C, on the other hand, is a brilliant young programmer who is still paying off student loans. Although A and B both plan to invest capital in the new firm, they hope to eventually attract additional outside investors. They have come to you for advice in setting up their new venture. What are their options in choosing a business entity, and what considerations should they take into account in making that choice?