Tax ACC ch7

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	$	2,700
Expenses:
Transportation from her home to the races		1,740
Depreciation on the dirt track car		5,640
Entry fees		6,000
Oil, gas, supplies, repairs for the dirt track car		2,860

Calculate Pennys deduction for the racing expenses assuming that the racing activity is a hobby, and Pennys AGI is $98,100 before considering the prize money.