Saanvi Patel $($Social Security number $123-45-6785),$ single and age $32,$ lives at $3218$ Columbia Drive, Spokane, WA $99210.$ She is employed as a regional sales manager by VITA Corporation, a manufacturer and distributor of vitamins and food supplements. During $2024,$ Saanvi is paid an annual salary of $$83,000$ and a separate travel allowance of $$30,000.$ In order to access the travel allowance, VITA requires adequate accounting by Saanvi. Saanvi participates in VITA's contributory health and $401($k$)$ plans. During $2024,$ she paid $$4,500$ for her share of the medical insurance and contributed $$11,000$ to the $401($k$)$ retirement plan. Saanvi uses her automobile $70\%$ for business and $30\%$ for personal. The automobile, a Toyota Avalon, was purchased new on June $30,2022,$ for $$37,000($no trade$-$in was involved$).$ Depreciation has been claimed using the MACRS $200\%$ declining$-$balance method, and no $179$ election was made in the year of purchase. $($For depreciation information, see text Section $8-3$d$.)$ During $2024,$ Saanvi drove $15,000$ miles and incurred and paid the following expenses relating to the automobile: Gasoline $$3,100$ Insurance $2,900$ Auto club dues $240$ Interest on car loan $1,100$ Repairs and maintenance $1,200$ Parking $($during business use$)600$ Traffic fines $($during business use$)500$ Because VITA does not have an office in Spokane, the company expects Saanvi to maintain one in her home. Out of $1,500$ square feet of living space in her apartment, Saanvi has set aside $300$ square feet as an office. Expenses for $2024$ that relate to her home office are listed below. Apartment rent $$18,000$ Apartment utilities $4,000$ Apartment insurance $($renter$$s casualty and theft coverage$)1,600$ Carpet replacement $($office area only$)1,200$ Saanvi's employment$-$related expenses for $2024($except for the trip to Korea; discussed next$)$ are summarized below. Airfare $$4,100$ Lodging $3,200$ Meals $($at local restaurants during travel$)2,800$ Transportation $($taxis and airport limos$)300$ Business gifts $540$ Continuing education $400$ Professional journals $140$ Most of Saanvi's business trips involve visits to retail outlets in her region. Store managers and their key employees, as well as some suppliers, were the parties entertained. The business gifts were boxes of candy costing $$30($$$25$ each plus $$5$ for wrapping and shipping$)$ sent to $18$ store managers at Christmas. The continuing education was a noncredit course dealing with improving management skills that Saanvi took online. In July $2024,$ Saanvi traveled to Korea to investigate a new process that is being developed to convert fish parts to a solid consumable tablet form. She spent one week checking out the process and then took a one$-$week vacation tour of the country. The round$-$trip airfare was $$3,600,$ and her expenses relating to business were $$2,100$ for lodging $($$$300$ each night$),$ $$1,470$ for meals, and $$350$ for transportation. Upon returning to the United States, Saanvi sent her findings about the process to her employer. VITA was so pleased with her report that it gave her an employee achievement award of $$10,000.$ The award was sent to Saanvi in January $2025.$ Besides the items already mentioned, Saanvi had the following receipts in $2024$: Interest income$$ City of Tacoma general purpose bonds $$350$ Olympia State Bank $400$ $$750$ Proceeds from property sales$$ City lot $$13,000$ Sailboat $18,00031,000$ Cash found at airport $5,000$ Regarding the city lot $($located in Vancouver$),$ Saanvi purchased the property in $2009$ for $$16,000$ and held it as an investment. Unfortunately, the neighborhood where the lot was located deteriorated, and property values declined. In $2024,$ Saanvi decided to cut her losses and sold the property for $$13,000.$ The sailboat was used for pleasure and was purchased in $2020$ for $$16,500.$ Saanvi sold the boat because she purchased a new and larger model $($see below$).$ While at the Spokane airport, Saanvi found an unmarked envelope containing $$5,000$ in $$50$ bills. Because no mention of any lost funds was noted in the media, Saanvi kept the money. Saanvi's other expenses for $2024($not previously noted$)$ are summarized below: Medical $($not covered by insurance$)$ $$6,000$ State and local general sales tax $3,400$ Church pledge $(2024$ and $2025)7,400$ Fee paid for preparation of $2023$ income tax return $500$ Contribution to mayor$$s reelection campaign fund $200$ Contribution to a Coverdell education savings account $($on behalf of a favorite nephew$)2,000$ Saanvi keeps careful records regarding sales taxes. In $2024,$ the sales tax total was unusually high due to the purchase of a new sailboat. In $2024,$ Saanvi decided to pay her church pledge for both $2024$ and $2025.$ The insurance premium was on a policy covering her father's life. $($Saanvi is the designated beneficiary under the policy.$)$ Saanvi's employer withheld $$8,400$ for Federal income tax purposes, and she applied her $$500$ overpayment for $2023$ toward the $2024$ tax liability. Saanvi's employer withheld $\backslash (\backslash$$ $8,400\backslash )$ for Federal income tax purposes, and she applied her $\backslash (\backslash$$