Question 1. A client asks your advice on the following situation. They are going to start a manufacturing company with two outside investors. The investors will be not be employees; your client will be a full-time employee and CEO. They want to know what form of business you recommend the company be. Compare the pros and cons of each business form along with your final recommendation.
Question 2. What is basis? How is tax basis different from an asset in financial accounting? Is it possible to have a negative tax basis? Can you think of an example of negative basis?