Facts: Pedro and his friend Lopez are starting a law firm together….

Question Answered step-by-step Facts: Pedro and his friend Lopez are starting a law firm together…. Facts:Pedro and his friend Lopez are starting a law firm together. Pedro will provide legal help to businesses and Lopez to individuals, they have a third friend Andrea who will be investor in the firm but will not provide clients with legal services. The are trying to decide which legal entity they want to setup, Partnership, LLC, LLP or S Corporation or C Corporation. In addition, Andrea wants to be allocated all municipal bond interest and the majority of debt interest. Pedro plans to work 100% of his time and energy in the business and Lopez plans to work only 30-50% of the time. Pedro not only wants to get paid more but be guaranteed money every year since he will have no side income like Andrea and Lopez do. Pedro needs to pay his personal bills. Please advise in a letter what Pedro, Andrea and Lopez should do and how they should setup their business and what tax impacts may arise. need a professional letter and provide references to primary and secondary sources.  Pedro has no capital to invest in the partnership, so he will contribute services and $1,000 cash.Andrea will contribute the largest capital of $50,000 plus a building with FMV $800,000 and basis of $300,000 and a liability of $250,000.Lopez will contribute stock in Apple with a FMV of $65,000 and basis of $20,000. Law Social Science Tax law TAXATION ACCT Share QuestionEmailCopy link Comments (0)