Give one or more examples to show how a taxpayer might take advantage of preferential tax rates on long$-$term capital gains by structuring transactions to produce capital gains rather than ordinary income.

$13.$ 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

a$.$ Albert invests his savings in tax$-$exempt state bonds.

b$.$ Betty invests in non dividend$-$paying corporate stocks by using borrowed funds.

c$.$ Chuck lends $$100,000$ to his daughter on an interest$-$free demand note.

d$.$ Ed invests $$100,000$ of his savings in a home for his own use.

e$.$ Frankie invests in a mutual fund that purchases only the indebtedness of the state in which he lives.

$15.$ With respect to the system of coding used in Exercises $13$ and $14,$ create one new illustration in each tax planning category.