Please draft a memorandum answering the following fact pattern and question. The length of the memorandum should be no longer than one page double spaced, but it should cover all relevant information.

Internal Law Research Memorandum

John and Mary Smith are a married couple living in the state of California. They own a rental home and some friends told them that they should own it in a business, but they couldn't explain why. John and Mary are concerned about the following issues:

1. Keep their tax liability as low as possible.
2. Keep their tax complexity as simple as possible.
3. They don't want it to be too complicated to operate.
4. Protect themselves from liability generated from the rental property.

What business entity would you recommend? Why? Explain how your business entity satisfies each of their concerns.