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Two individual taxpayers are forming a new business together and must select the appropriate entity type for their business (C corporation, S corporation, or partnership). For each situation in the table below, select the type of entity that is allowed under the tax law and is the most advantageous to the taxpayers for federal tax purposes. Refer to the tax rate schedule provided to help determine which entity form is best. Select the entity by clicking on the appropriate choice from the drop-down menu. Each option in the drop-down menu may be used once, more than once, or not at all.

Poruilar Forlaral Inromo Tav Datoe (Sinralol- \begin{tabular}{l|l|} \hline & \multicolumn{1}{|c|}{ Consideration for New Business } \\ \hline 2 & Theownersareexpectingthebusinesstogeneratesubstantialprofitsassoonastheybeginoperations.Theownersplantoleavetheprofitsinthebusinessandnottakedistributionsforseveralyears.Bothownersareinthelowesttwoindividualincometaxbrackets. \\ \hline 3 & Theownersareexpectingthebusinesstogeneratesubstantialprofitsassoonastheybeginoperations.Theownersplantoleavetheprofitsinthebusinessandnottakedistributionsforseveralyears.Bothownersareinthehighestindividualincometaxbracket. \\ \hline 4Theownersareexpectingthebusinesstogeneratelossesinthefirstfewyears.Theownersarebothactiveparticipantsintheoperationsofthebusinessandhaveseveralothersourcesofbusinessincome.Bothownersareinthemiddleindividualincometaxbrackets. \\ \hline Theownersareexpectingthebusinesstogeneratesubstantialprofitsassoonastheybeginoperations.Theyplantotakecashdistributionsanddistributealloftheprofitstotheownerseachyear.Bothownersareinthehighestindividualincometaxbracket. \\ \hline Theownersareexpectingthebusinesstogeneratesubstantialprofitsassoonastheybeginoperations.Theyplantotakecashdistributionsanddistributealloftheprofitstotheownerseachyear.Bothownersareinthelowesttwoindividualincometaxbrackets. \\ \hline \end{tabular} The owners are expecting the business to generate substantial profits as soon as they begin operations. They plan to distribute all of the 7 profits to the owners each year and anticipate that most of the operating distributions will be of appreciated noncash property. Both owners are in the highest individual income tax bracket. The business provides professional services to customers. The owners are expecting the business to generate substantial profits as soon as they begin operations. Both owners are active participants in 8 the operations of the business and receive compensation for their services from the business. Both owners are in the lowest two individual income tax brackets and do not want to be required to pay self-employment tax