Please help with this situation analysis for three or four pages 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. He is in the 35% federal marginal tax bracket. John has approximately $800,000 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 or Pennsylvania with nine -twelve employees initially. John projects a loss in the first year of operation of approximately $90,000 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 $170,000 of fixed asset purchases during the first year of operation. Three of Johns friends, Todd who is an attorney with a scientific background, Scott, who is an IT specialist, and Kate, who is a marketing/public relations and project manager, will join the business venture. Todds contributions to the business venture will his legal services, business advice, and cash of approximately $100,000. Scott will only contribute his services. Kate will contribute $40,000 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 above, what entity do you recommend for John in this situation- sole proprietorship, partnership, C Corporation, S corporation, or LLC? Why? 2.Briefly discuss the state tax implications and differences of operating in New Jersey or Pennsylvania? 3.What other current business and personal tax planning advice would you give John?