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Penny, a full-time blochemist, loves stock car racing. To feed her passion, she bought a...

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Penny, a full-time blochemist, 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 $ 3,320 Expenses: Transportation from her home to the races 1,650 Depreciation on the dirt-track car 4,720 Entry fees 5,500 oil, gas, supplies, repairs for the dirt-track car 2,530 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 100

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