Compute pennys deduction for the racing expenses

Reference no: EM131956376

Problem

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 $3,580

Transportation from her home to the races 1,630

Depreciation on the dirt-track car 4,180

Entry fees 3,200

Oil, gas, supplies, repairs for the dirt-track car 2,350

Calculate Penny's deduction for the racing expenses assuming that the racing activity is a hobby, and Penny's AGI is $96,620 before considering the prize money.

Reference no: EM131956376

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