Tax Research Problem Edward Abramov, a professional novelist, is in the process of drafting his first best-seller publication, which is expected to be released by the publisher in March 2022. Edward is originally from Russia and he is also a US permanent resident. Edwards novel is co-authored with Robert White, a more experienced novelist, who is a US citizen. Edward expects to generate approximately $750,000 in revenues in 2022 from book sales, conferences, interviews and awards. They expect to spend about $50,000 mainly in publisher fees and travel expenses during 2022. Ed and Robert estimate that they will spending roughly $5,000 ($3,000 in research and $2,000 in fees) in 2021 to publish the book, but they will not generate any revenues in 2021. Ed and Robert would like to form a business entity, in which they plan to go 50/50. Eds AGI was $45,000 and Roberts AGI was $110,000. Prior to this business venture, they both recorded revenues and expenses from publishing in Form 1040 (Schedule C) as sole proprietors in 2020. They are both actively involved in Publishing books, which is their main business activity. On February 1 2021, Edward and Robert come to you for some tax advice on what business entity they should create to minimize their tax exposure. They are planning to incorporate their business in Florida. Edward and Robert do not have much accounting/tax knowledge. Edward would like to pay the least amount of taxes in future tax years. Robert mentioned he is a bit worried that his book publication may generate controversy and potential lawsuits given that he plans to reveal some secrets of people that he dealt with in the past. They would like to make this business entity simple to manage and they are not considering adding more business partners. Assumption: According to the recent estimates given by U.S taxing authority, the average compensation for a writer is in the range of $30,000-$50,000. Questions: Which form of business do you recommend Ed and Robert to start in these tax years and why? What tax implication does this business entity entail? What are the potential advantages and disadvantages of your advice for Robert and Edward? What tax forms will they be required to file in 2021 and subsequent years? Write a 3-4 page, double-spaced, tax research paper/report addressing these questions based on your analysis and research. Please include relevant tax authority sources such as the IRS. You may also use the book and supplemental material provided in class.