8. LO.1,2, 3, 4 Mr. and Mrs. Chang, married filing jointly, will establish a manufacturing business. The couple anticipates that the business will be profitable immediately due to a patent that Mrs. Chang holds; profits for the first year will be about

$300,000 and will increase at a rate of about 20% per year for the foreseeable future.

Advise the Changs as to the form of business entity they should select. The Changs are in the 37% Federal income tax bracket.