1244 in the corporate resolution approving the issuance of stock in qualifying corporation, if only to remind the shareholders that ordinary owned and operated by Thelma High and Allen Woody. Thelma and Allen High Technologies, Inc. ("Hi-Tech") is a small semiconductor company $400,000 in exchange for 50 percent of the corporation's common stock, Hi. formed Hi-Tech as a C corporation three years ago by each contributing has decided to seek outside financing. It recently approached Jennifer Leech Tech has been planning a major expansion of its manufacturing facility and After investigating the corporation's financial position, Jennifer has decided to make the investment. Her objectives are to obtain maximum security while at the same time participating in Hi-Tech's potential growth. Jennifer also is concerned about the rapid change in computer technology loss treatment is available if that unhappy event should later occur. PART 2 152 TAXATION OF C CORPORATIONS CHAP DIS PROBLEM A. IN about the possibility of her investing $200,000 in Hi-Tech. 1. D Code: Regu T throu "like upor mar infl exp and would like to plan for the most favorable tax consequences in the unfortunate event that her investment in Hi-Tech becomes worthless. Consider to what extent Jennifer will realize her economic and tax goals it in the alternative, her investment takes the following forms: (a) A $200,000 unregistered five-year Hi-Tech note bearing market rate interest. (b) A $200,000 Hi-Tech registered bond bearing market rate interest. pu! su sh ch m t + (c) A $190,000 Hi-Tech registered bond bearing market rate interest and $10,000 for warrants to purchase Hi-Tech common stock at a favorable price. (d) $200,000 of Hi-Tech common stock. (e) $200,000 of Hi-Tech convertible preferred stock. (1) Same as (d), above, except Thelma and Allen originally capitalized Hi-Tech by each contributing $500,000. (9) Same as (d), above, except Jennifer plans to give the Hi-Tech common stock to her son, Peter, as a wedding gift. (h) Same as (a), above, except Jennifer and her son, Peter, will purchase the Hi-Tech common stock through Leech Associates, a venture capital partnership. 1244 in the corporate resolution approving the issuance of stock in qualifying corporation, if only to remind the shareholders that ordinary owned and operated by Thelma High and Allen Woody. Thelma and Allen High Technologies, Inc. ("Hi-Tech") is a small semiconductor company $400,000 in exchange for 50 percent of the corporation's common stock, Hi. formed Hi-Tech as a C corporation three years ago by each contributing has decided to seek outside financing. It recently approached Jennifer Leech Tech has been planning a major expansion of its manufacturing facility and After investigating the corporation's financial position, Jennifer has decided to make the investment. Her objectives are to obtain maximum security while at the same time participating in Hi-Tech's potential growth. Jennifer also is concerned about the rapid change in computer technology loss treatment is available if that unhappy event should later occur. PART 2 152 TAXATION OF C CORPORATIONS CHAP DIS PROBLEM A. IN about the possibility of her investing $200,000 in Hi-Tech. 1. D Code: Regu T throu "like upor mar infl exp and would like to plan for the most favorable tax consequences in the unfortunate event that her investment in Hi-Tech becomes worthless. Consider to what extent Jennifer will realize her economic and tax goals it in the alternative, her investment takes the following forms: (a) A $200,000 unregistered five-year Hi-Tech note bearing market rate interest. (b) A $200,000 Hi-Tech registered bond bearing market rate interest. pu! su sh ch m t + (c) A $190,000 Hi-Tech registered bond bearing market rate interest and $10,000 for warrants to purchase Hi-Tech common stock at a favorable price. (d) $200,000 of Hi-Tech common stock. (e) $200,000 of Hi-Tech convertible preferred stock. (1) Same as (d), above, except Thelma and Allen originally capitalized Hi-Tech by each contributing $500,000. (9) Same as (d), above, except Jennifer plans to give the Hi-Tech common stock to her son, Peter, as a wedding gift. (h) Same as (a), above, except Jennifer and her son, Peter, will purchase the Hi-Tech common stock through Leech Associates, a venture capital partnership