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 advisabl9, analysis, and conclusions. Support your answers with cites to code, regulations, cases, rulings, IRS publications or other research data.

1. S&TCC estimated that it would cost $25,000 to $50,000 to demolish the old home. All the necessary permits to demolish the home were obtained from the Village of Mos Eisley but Han balked at the cost of demolition. Being clever and wanting a tax deduction, Han and Leia decided to donate the home to the Mos Eisley Rebellion Fire Departments (MORFED) for a training exercise. On October 1, as part of fire prevention month, MORFED burned down the structure and then put out the fire. MORFED charged Han and Leia $2,000 to haul away the burned out remains of the old home.

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.)