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.
A. increase in taxable income of $2,000
B. increase in taxable income of $1,640
C. no change in taxable income
D. decrease in taxable income of $560
E. decrease in taxable income of $2,200
Answer: B. increase in taxable income of $1,640