You are a tax partner in a regional CPA firm. One of your fellow partners requests you to assist in a presentation to a new client, John Smith. John is a business executive with a scientific background, and is about to form a new business. John is a married taxpayer with three children, living in Pennsylvania. He is in the 37% federal marginal tax bracket. John has approximately $900,000 to invest in the new business. John plans to start a pharmaceutical consulting company. He has developed a business plan and has obtained available financing of $500,000 secured by his assets. The business will be located in New Jersey, Pennsylvania or Florida with ten -twelve employees initially. John projects a loss in the first year of operation of approximately $70,000 due to start up costs, including marketing and business development. He is interested in protecting his personal assets from the creditors of the business venture. John anticipates making $160,000 of fixed asset purchases during the first year of operation. Three of John's friends, will join this business venture. Todd who is an attorney with a scientific background, living in Florida. Scott, who is an IT specialist, lives in California. Kate, who is a marketing/public relations and project manager, lives in Pennsylvania. Todd's contributions to the business venture will his legal services, business advice, and cash of approximately $50,000. Scott will contribute $10,000 and his services. Kate will contribute $90,000 and her services to the business. Since the business is projected to be profitable and expand in year two, John may seek funding from outside investors for expansion in year three. He does not want a large number of investors. Requirements Please prepare a concise written report responding to the following questions: 1. Based on the information above, what entity do you recommend for John in this situation- sole proprietorship, partnership, C Corporation, S corporation, or LLC? Why? 2. John indicates that the employees will be able to work remotely during the first year of operations. Briefly discuss the state tax implications and differences of operating in New Jersey, Pennsylvania or Florida? 3. What other business and personal tax planning advice would you give John? The above essay will be evaluated based on your presentation and the level of knowledge for this course. Please list all citations. Suggested lenght 2-4 pages.