Exercises 13. Using the following codes, identify the basic approach(es) to tax avoidance that are used in each of the following cases: AR Avoiding recognition of taxable income CT Changing the timing of recognition of income, gains, deductions, losses, and credits CJ Changing tax jurisdictions CC Changing the character of income RP Tax planning among related taxpayers Albert invests his savings in tax-exempt state bonds. Betty invests in non dividend-paying corporate stocks by using borrowed funds. Chuck lends $100,000 to his daughter on an interest-free demand note. Ed invests $100,000 of his savings in a home for his own use. Frankie invests in a mutual fund that purchases only the indebtedness of the state in which he lives.

14. Using the codes from Exercise 13, identify the basic approach(es) to tax avoidance that are used in each of the following cases: Eileen has a high marginal tax rate but expects that rate to decrease next year. Accordingly, she makes a large charitable contribution in the current year. Evelyn has her controlled corporation pay her a salary instead of a dividend during the current year. Georgia grows most of her own food instead of taking a second job. At retirement, Tom moves from New York (a state with a high income tax) to Florida (a state with no income tax).