High Technologies, Inc. (Hi-Tech) is a small semiconductor company owned and operated by Thelma High and Allen Woody. Thelma and Allen formed Hi-Tech as a C corporation three years ago by each contributing $400,000 in exchange for 50 percent of the corporations common stock. Hi-Tech has been planning a major expansion of its manufacturing facility and has decided to seek outside financing. It recently approached Jennifer Leech about the possibility of her investing $200,000 in Hi-Tech. After investigating the corporations financial position, Jennifer has decided to make the investment. Her objectives are to obtain maximum security while at the same time participating in Hi-Techs potential growth. Jennifer also is concerned about the rapid change in computer technology 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 if, in the alternative, her investment takes the following forms? Consider the ability to share in profits, the nature of the gain on sale at a profit, and the character of the loss if sold for less than purchased.

a. A $200,000 Hi-Tech registered bond bearing market-rate interest.

b. $200,000 of Hi-Tech common stock.

c. Same as (b), above, except Thelma and Allen originally capitalized Hi-Tech by each contributing $500,000.

d. Same as (b), above, except Jennifer plans to give the Hi-Tech common stock to her son, Peter, as a wedding gift.