Problem 7-21 (LO 7-1) (Algo) Penny, a full-time biochemist, loves stock car racing....
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Problem 7-21 (LO 7-1) (Algo) 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: $ 3,440 Prize money Expenses: Transportation from her home to the races Depreciation on the dirt-track car Entry fees Oil, gas, supplies, repairs for the dirt-track car 1,330 4,360 6, 200 2,280 What are the tax effects of Penny's 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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