Glenn is an accountant who races stock cars as a hobby.This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races.What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.

Question

Quizplus · Accepted Answer

Under the Tax Cuts and Jobs Act of 2017, individuals can no longer deduct hobby expenses. Therefore, Glenn's $2,000 in winnings increases his taxable income, but he cannot deduct the $4,200 in expenses, resulting in an increase in taxable income of $2,000.

Glenn Is an Accountant Who Races Stock Cars as a Hobby.This