He'd be smart to take it into a C Corp, with a flat tax rate of 21% federal versus the 37% he'd pay federally as an individual. He'd pay a bit more to Illinois, but the federal savings would far out weigh that and the deductions he could take on that income on a C Corp would far outweigh what he could take on his individual return. Unless I'm misunderstanding his request, I feel like it would be foolish to not do this.