Donna, a real estate investor and a client of your firm, is considering opening a live music venue in a vacant storefront in one of the strip shopping centers that she owns in Tucson, AZ. She is a blues musician and has been playing keyboards and singing in various bands around town for years. She hasn't been able to find a tenant for the storefront for months and is thinking it would be nice to create a musical "home" for herself and her musician friends. She is thinking about putting in a recording studio and hosting recording events in addition to concerts. She doesn't plan to sell alcohol but will be selling coffee and other non-alcoholic beverages and snacks, and she is thinking of renting space on a rotating basis to local food trucks to create a festive atmosphere. Donna is coming to you for advice regarding what legal form of business to choose. She is planning on sharing the costs of start-up and initial operations with two others but doesn't know whether they should become owners or creditors. Since she already owns the property, she only plans to charge rent equal to the incremental operating costs of the space (electricity, insurance, taxes, repairs, etc.). She plans on $50,000 of start-up costs to include recording studio gear and build-out costs. Donna will be contributing $20,000 worth of new recording gear that she purchased for personal use about six months ago, and her two friends will contribute $15,000 in cash each. Donna expects the business to lose $15,000 in the first year of operations, and to earn a profit of $30,000 per year in the following years. Even though she won't be selling alcohol initially, there is always the risk that a patron will be seriously injured while on the property, and she may someday decide to get an alcoholic beverage license, which would further increase her risk of loss from someone getting injured. In light of the above factors, please post a memo that you will share with Donna when you meet with her next week to discuss your findings. In your memo, please include the following: 1. The pros and cons of alternative forms of business organization that you have considered 2. The form of business organization that you recommend 3. The tax year-end and accounting method that you feel she should adopt 4. The options that Donna has with respect to transferring the recording equipment to the new entity 5. Research of Tax Code and other authoritative sources used in reaching your conclusion, cited in good form