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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 | $ | 3,200 |
Expenses: | ||
Transportation from her home to the races | 2,150 | |
Depreciation on the dirt-track car | 4,220 | |
Entry fees | 5,600 | |
Oil, gas, supplies, repairs for the dirt-track car | 2,830 | |
|
Calculate Pennys deduction for the racing expenses assuming that the racing activity is a hobby and that Pennys AGI is $96,000 before considering the prize money.
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