Sara is an entrepreneur who likes to be actively involved in her business ventures. She is going to invest $500,000 in a business that she projects will produce a tax loss of approximately $100,000 per year in the short run. However, once consumers become aware of the new product being sold by the business and the quality of the service it provides, she is confident the business will generate a profit of at least $125,000 per year.
Sara earns substantial other income (from both business ventures and investment activities) each year. Advise Sara on the business form she should select for the short run. She will be the sole owner.