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. Leia is uninterested in the business and is more interest in saving the planet from destruction. Unknown to Han, Leia donated his antiques blasters to Stop the Sith Foundation. (StSF) Han paid $160,000 for the prized pieces and they are conservatively valued at ten (10) time the purchase price. She also made a pledge to StSF in the amount of $200,000. She gave them a check in the amount of $35,000 on December 31, 2023.

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.)