Kyle drives a race car in his spare time and on weekends.His records regarding this activity reflect the following information for the year. What is the allowable deduction (before any AGI limitation)for depreciation assuming that this activity is not engaged in for profit and Kyle can itemize his deductions?

Question

Kyle drives a race car in his spare time and on weekends.His records regarding this activity reflect the following information for the year.  What is the allowable deduction (before any AGI limitation)for depreciation assuming that this activity is not engaged in for profit and Kyle can itemize his deductions?

Quizplus · Accepted Answer

Since the activity is not engaged in for profit, Kyle cannot take any deduction for depreciation. However, if he can itemize his deductions, he can deduct up to $1,400 for his car as a miscellaneous itemized deduction. This deduction is subject to a 2% of AGI limitation, but since the question asks for the allowable deduction before any AGI limitation, the answer is $1,400.

Kyle Drives a Race Car in His Spare Time and on Weekends.His