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 $2,500 expenses: transportation from her home to the races 1,000 depreciation on the dirt-track car 4,000 entry fees 3,500 oil, gas, supplies, repairs for the dirt-track car 2,050 what are the tax effects of penny’s racing income and expenses assuming that the racing activity is a hobby for penny?

Deductible expenses: 500 (hobby expense after revenue limit - 2% AGI floor) .

Explanation:

AGI Before activity: $97,500

Hobby Rev. : $2,500

AGI after activity: 100,000

Hobby expense: 10,550

Hobby expense after revenue limit: 2,500 (lessor of hobby rev. and hobby expense)

2% AGI Floor: 2,000

Deductible expenses: 500 (hobby expense after revenue limit - 2% AGI floor)

$500 is the answer.

odd consecutive integers are odd integers that follow each other. they have a difference of 2 between every two numbers. if n is an odd integer, then n, n+2, n+4 and n+6 will be odd consecutive integers. the first number in the pattern is always the variable on its own or in this case, "n". examples.