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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?

Penny's racing income
Penny's racing expense
Gross income for tax

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