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, 2019.

Han and Leia have come to you for tax help. 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. Unsupported conclusions without proper analysis will not win you points with the firms senior partner (me). Good luck.