Han and Leia have come to you for tax help for their 2023 tax year. What issues does their set of facts present to you as their tax advisor? What advice do you have for them? Please make any assumptions that you need in-order to address and respond to the issues presented by the fact pattern. Clearly state the assumptions that you make. It is advisable to utilize a memorandum style in which you address the facts, issues, analysis, and conclusions. Support your answers with cites to code, regulations, cases, rulings, IRS publications or other research data.

1. Han and Leias (mom and dad college age child Chewie (age 21) is attending Inter-Galactic State University studying cosmic navigation and business as a fulltime student. Chewie had a summer job at GSLLC where he earned $12,000. He also received $15,000 from mom and dad and scholarships and grants used for tuition, fees, and books in the amount of $20,000. Mom and Dad also provide Chewie with health insurance at an annual cost of $7,000.

Do the Solos have any tax issues? (the answer is yes). What are they and how do they address them? The purpose of the study is to identify the tax issues and discuss them without trying to calculate a tax or an amount owed. In other words, why is an item income? Is something within or outside a limit? Remember the name of the course is Income Tax Planning so think through the facts and analyze the tax issues. Support your answer with a rule of law (use the textbook, the substantive resources in the modules, IRS pubs, Internal Revenue Code, Treasury Regs, cases, etc.)