Question
Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track
Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. Penny reported the following income and expenses from her nights at the track:
Prize money | $ 2,500 |
---|---|
Expenses: | |
Transportation from her home to the races | 1,000 |
Depreciation on the dirt-track car | 4,000 |
Entry fees | 3,500 |
Oil, gas, supplies, repairs for the dirt-track car | 2,050 |
What are the tax effects of Pennys racing income and expenses assuming that the racing activity is a hobby for Penny?
Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. Penny reported the following income and expenses from her nights at the track:
Prize money | $ 2,500 |
---|---|
Expenses: | |
Transportation from her home to the races | 1,000 |
Depreciation on the dirt-track car | 4,000 |
Entry fees | 3,500 |
Oil, gas, supplies, repairs for the dirt-track car | 2,050 |
What are the tax effects of Pennys racing income and expenses assuming that the racing activity is a hobby for Penny?
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